CA FOUNDATION

PAPER 2
Section A
Business Law
(Descriptive - 60 Marks)

Section B
Business
Correspondence
and Reporting
(Descriptive - 40 Marks)
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Paper 2 (Section A): Business Laws (60 Marks)

To develop an understanding of significant provisions of select business laws and

acquire the ability to address basic application-oriented issues.

Weightage Content Area

1. The Indian Contract Act, 1872:       


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Paper 2 (Section B): Business Correspondence

and Reporting (40 Marks)

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and reporting.

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Paper 2: Business Law & Business Corresponding
and Reporting

Chapterwise Weightage (Marks)

Part A - Business Law (60 marks)
Sr. No Chapter Name May-18 Nov-18 May-19 Nov-19 Average
1 The Indian Contract Act, 1872 22 22 22 26 23
2 The Sale of Goods Act, 1930 16 16 16 16 16
3 The Indian Partnership Act, 1932 16 16 16 12 15
4 The Limited Liability Partnership Act 5 5 5 5 5
5 The Companies Act, 2013 13 13 13 13 13
Part B - Business Correspondence and Reporng (40 Marks)
Sr. No Chapter Name May-18 Nov-18 May-19 Nov-19 Average
1 Communicaon 7 7 7 7 7
2 Sentences types 7 7 7 7 7
3 Vocabulary 7 7 7 7 7
4 Comprehension passages 5 5 5 5 5
5 Note Making 5 5 5 5 5
6 Introducon to basics of wring 0 0 0 0 0
7 Precis wring 5 5 5 5 5
8 Arcle wring 5 5 5 5 5
9 Report Wring 0 5 0 5 2.5
10 Formal LeCers 10 5 6 4 6.25
11 Formal Mails 0 0 4 0 1.33
12 Resume Wring 0 5 0 0 1.25
13 Meengs 0 0 0 0 0
   
   
  

   

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 CHAPTER1
THE INDIAN CONTRACT ACT, 1872

INTRODUCTION
 IndianContractActreceiveditsassenton25thApril,1872.
 IndianContractActcameintoforceon1stSeptember,1872.
 Itis applicabletowholeofIndiaexceptJammuandKashmir.
 Itisconsideredtobenotcompleteandnotexhaustiveinnature.
 Itcreates“JusInPersonam”.Itmeansrightagainstaparticularperson.

UNIT 1: NATURE OF CONTRACTS

Q1 What is a Contract ? State the Essential Elements of a Valid Contract?

Ans. Thetermcontractisdefinedundersection2(h)oftheIndianContractAct,1872as
“an agreement enforceable by law”.
Thecontract consistsof twoessential elements:
(i) an agreement and
(ii) its enforceability by law.
Contract = Accepted proposal/Agreement + Enforceability by law
IntermsofSection10oftheAct,“allagreementsarecontractsiftheyaremadebythefreeconsentof
the parties competent to contract, for a lawful consideration and with a lawful object and are not
expressly declared to be void”.
Essential Elements Of A Valid Contract
1. Two Parties: One cannot contract with himself. A contract involves at least two parties one party
makingtheofferandtheotherpartyacceptingit.Acontractmaybemadebynaturalpersonsandby
other persons having legal existence e.g. companies, universities etc.
2. Parties must intend to create legal obligations: Theremustbeanintentiononthepartoftheparties to
createlegalrelationshipbetweenthem.Socialordomestictypeofagreementsarenotenforceablein
courtoflawandhencetheydonotresultintocontracts.

Chapter-1 : The Indian Contract Act, 1872 3

 Case Law : (Balfourv.Balfour)
Ahusbandagreedtopaytohiswifecertainamountasmaintenanceeverymonthwhilehe wasabroad.
Husband failed to pay the promised amount. Wife sued him for the recovery of the amount. Here in
thiscasewifecouldnotrecoverasitwasasocialagreementandthepartiesdidnotintendtocreateany
legal relations.
3. Other Formalities to be complied with in certain cases: Incaseofcertaincontracts,thecontracts must
beinwriting,e.g.ContractofInsuranceisnotvalidexceptasawrittencontract.
4. Certainty of meaning: Theagreementmustbecertainandnotvagueorindefine
5. Possibility of performance of an agreement: Thetermsofagreementshouldbecapableof performance.
Anagreementtodoanactimpossibleinitselfcannotbeenforced.
6. Offer and Acceptance : An agreement is the first essential element of a valid contract. According to
Section 2(e) of the Indian Contract Act, 1872, “Every promise and every set of promises, forming
considerationforeachother,isanagreement”andaccordingtoSection2(b)“Aproposalwhenaccepted,
becomesapromise”.Anagreementisanoutcomeofofferandacceptance.
Free Consent: Twoormorepersonsaresaidtoconsentwhentheyagreeupon thesamethinginthe
samesense.Thiscanalsobeunderstoodasidentityofmindsinunderstandingthetermsvizconsensus
adidem.Furthersuchaconsentmustbefree.Consentwouldbeconsideredasfreeconsentifitisnot
caused by coercion, undue influence, fraud or, misrepresentation or mistake.
8. Capacity of Parties: Capacitytocontractmeansthelegalabilityofapersontoenterintoavalid contract.
Section11oftheIndianContractActspecifiesthateverypersoniscompetenttocontractwho
(a) isoftheageofmajorityaccordingtothelawtowhichheissubjectand
(b) isofsoundmindand
(c) isnototherwise disqualifiedfromcontractingbyanylawtowhichheissubject.
9. Lawful Consideration and Object: Theconsiderationandobjectoftheagreementmustbelawful.
10. Not expressly declared to be void: Theagreemententeredintomustnotbewhichthelawdeclaresto
be either illegal or void. An illegal agreement is an agreement expressly or impliedly prohibited by
law. A void agreement is one without anylegal effects.
Q2 State the Types Of Contract?
Ans. AsperTheIndianContractAct1872contractsareclassifiedonthefollowingbasis:
I. On the basis of the Validity
1. Valid Contract: Anagreementwhichisbindingandenforceableisavalidcontract.Itcontainsall
theessentialelementsofavalid contract.
2. Void Contract: Section2(j)statesas follows: “Acontractwhichceasesto beenforceable bylaw
becomes void when it ceases to be enforceable”. Thus a void contract is one which cannot be
enforcedbyacourtoflaw.
3. Voidable Contract: Section2(i) defines that “an agreement which is enforceable by law at the
optionofoneormorepartiesthereto,butnotattheoptionoftheotherorothersisavoidable
contract”.
Thisinfactmeanswhereoneofthepartiestotheagreementisinapositionorislegallyentitled
orauthorizedtoavoidperforminghispart,thentheagreementistreatedandbecomesvoidable.
4. Illegal Contract : Itisacontractwhichthelawforbidstobemade.Thecourtwillnotenforcesuch
acontractbutalsotheconnectedcontracts.Allillegalagreementsarevoidbutallvoidagreements
are not necessarily illegal.
Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting - 4 -
 5. Unenforceable Contract: Where a contract is good in substance but because of some technical
defecti.e.absenceinwriting,barredbylimitationetc.oneorboththepartiescannotsueuponit,
itisdescribedasanunenforceablecontract
II. On the basis of the Formation
1. Express Contracts: Acontractwouldbeanexpresscontractifthetermsareexpressedbywords
spokenor inwriting.Anypromiseismadeinwordsthepromiseissaidtobeexpress.
2. Implied Contracts: Impliedcontractsincontrastcomeintoexistencebyimplication.Mostoften
the implication is by law and or by action. Any promise is made otherwise than in words the
promise issaid tobeimplied.
3. Tacit Contracts: Theword Tacit means silent.Tacit contracts are those that areinferred through
the conductofpartieswithoutanywordsspokenorwritten.
Aclassicexampleoftacitcontractwouldbewhencashiswithdrawnbyacustomerofabankfrom
the automatic teller machine [ATM]. Another example of tacit contract is where a contract is
assumedtohavebeenenteredwhenasaleisgiveneffecttoatthefallofhammerinanauction
sale.
4. QuasiContract: Aquasicontractisnotanactualcontractbutitresemblesacontract.Itiscreated
by lawundercertain circumstances.
5. EContracts: Whenacontractisenteredintobytwoormorepartiesusingelectronicsmeans,such
asemailsisknownasecommercecontracts.
III. On the basis of the Performance
1. Executed Contract: Theconsiderationinagivencontractcouldbeanactorforbearance.When the
actisdoneorexecutedortheforbearanceisbroughtonrecord,thenthecontractisanexecuted
contract.
2. Executory Contract: Inanexecutorycontracttheconsiderationisreciprocalpromiseorobligation.
Suchconsiderationistobeperformedinfutureonlyandthereforethesecontractsaredescribed
asexecutorycontracts.
3. Unilateral Contract: Unilateralcontractisaonesidedcontractinwhichonepartyhas performed
hisdutyorobligationandtheotherparty’sobligationisoutstanding.
4. Bilateral Contract: ABilateralcontractisone wheretheobligationorpromiseisoutstanding on
thepartofboththeparties.
Q3 State the Difference between Void and Voidable Contract ?
Ans.
S.No. Basis Void Contract Voidable Contract

1 Meaning AContractceasestobeenforceable Anagreementwhichisenforceableby

bylawbecomesvoidwhenitceases lawattheoptionofoneormoreofthe
tobeenforceable. partiesthereto,butnotattheoption
oftheotherorothers,isavoidable
contract.
2 Cause Acontractbecomesvoidduetochange Acontractbecomesavoidablecontract
inlaworchangeincircumstances iftheconsentofapartywasnotfree.
beyondthecontemplationofparties.

Chapter-1 : The Indian Contract Act, 1872 - 5 -

 3 Performance Avoidcontractcannotbeperformed Iftheaggrievedpartydoesnot,within
ofcontract reasonable time, exercise his right to
avoidthecontract,anypartycansuethe
otherforclaimingtheperformanceof
the contract.
4 Rights Avoidcontractdoesnotgrantany Thepartywhoseconsentwasnotfree
righttoanyparty. hastherighttorescindthecontract
Q4 State the Difference between Void and Illegal Agreement ?
Ans.
Sr. Basis of Void agreement Illegal agreement
No. difference
1 Scope Avoidagreementisnotnecessarily Anillegalagreementisalwaysvoid.
illegal.
2 Nature Notforbiddenunderlaw. Areforbiddenunderlaw.
3 Punishment Partiesarenotliableforany Partiestoillegalagreementsareliable
punishmentunderthelaw. forpunishment.
4 Collateral
Agreement It’snotnecessarythatagreements Agreementscollateraltoillegal
collateraltovoidagreementsmayalso agreementsarealwaysvoid.
bevoid.Itmaybevalidalso.
Q5 Define An Offer . State the types of an offer . Also explain the Essentials of A Valid Offer ?
Ans. Definition of Offer/Proposal :
According to Section 2(a) of the Indian Contract Act, 1872,“whenoneperson signifiestoanotherhis
willingnesstodoortoabstainfromdoinganythingwithaviewtoobtainingtheassentofthatotherto
suchactorabstinence,heissaidtomakeaproposal”.
Types Of Offer
(a) General offer: Itisanoffermadetopublicatlargeandhenceanyonecanacceptanddothedesiredact
Case Law: CarlillVs.CarbolicSmokeBallCo.(1893)
Facts: In thisfamouscaseCarbolic smoke BallCo.advertisedin severalnewspapersthat areward of
£100wouldbegiventoanypersonwhocontractedinfluenzaafterusingthesmokeballsproducedby
the Carbolic Smoke Company according to printed directions. One lady, Mrs. Carlill, used the smoke
ballsasperthedirectionsofcompanyandeventhensufferedfrominfluenza.Held,shecouldrecover
theamountasbyusingthesmokeballsshehadacceptedtheoffer.
(b) Special/Specific offer: Whentheofferismadetoaspecificoranascertainedperson,itisknownasa
specificoffer.Specificoffercanbeacceptedonlybythatspecifiedpersontowhomtheofferhasbeen
made
(c) Cross offer: Whentwopartiesexchangeidenticaloffersinignoranceatthetimeofeachother’soffer,
theoffersarecalledcrossoffers.Thereisnobindingcontractinsuchacasebecauseoffermadebya
personcannotbeconstruedasacceptanceoftheanother’soffer.
(d) Counter offer: When the offeree offers to qualified acceptance of the offer subject to modifications
and variations in the terms of original offer, he is said to have made a counter offer. Counteroffer
amountstorejectionof the originaloffer.ItisalsocalledasConditionalAcceptance.
(e) Standing or continuing or open offer: Anofferwhichisallowedtoremainopenforacceptanceover a
periodoftimeisknownasstandingorcontinuingoropenoffer.Tendersthatareinvitedforsupplyof
goodsisakindofstandingoffer.
Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting - 6
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 Essential of a valid offer
1. It must be capable of creating legal relations: Offermustbesuchasinlawiscapableofbeingaccepted
and giving rise to legal relationship.
2. It must be certain, definite and not vague: Ifthetermsofanofferarevagueorindefinite,itsacceptance
cannot createany contractual relationship.
3. It must be communicated to the offeree: An offer, to be complete, must be communicated to the
person towhomitismade,otherwisetherecanbenoacceptanceofit.Anacceptanceofanoffer,in
ignoranceoftheoffer,isnotacceptanceanddoesnotconferanyrightontheacceptor.
Case Law:LalmanShuklav.GauriDutt
Facts: G (Gauridutt)senthisservantL(Lalman)totracehismissingnephew.Hethenannouncedthat
anybodywhotracedhisnephewwouldbeentitledtoacertainreward.Ltracedtheboyinignoranceof
thisannouncement.Subsequentlywhenhecametoknow ofthe reward,heclaimedit.Held, hewas
notentitledtothereward,ashedidnotknowtheoffer.
4. It must be made with a view to obtaining the assent of the other party: Offermustbemadewitha view
to obtaining the assent of the other party addressed and not merely with a view to disclosing the
intention of making an offer.
5. It may be conditional: Anoffercanbemadesubjecttoanytermsandconditionsbytheofferor.
6. Offer should not contain a term the non compliance of which would amount to acceptance: Thus,one
cannotsaythatifacceptanceisnotcommunicatedbyacertaintimetheofferwouldbeconsideredas
accepted.
7. Offer may be express or implied: Anoffermaybemadeeitherbywordsorbyconduct.
8. An offer should be distinguished from an invitation to offer. Anofferisdefiniteandcapableof converting
anintentionintoacontract.Whereasaninvitationtoanoffer isonlyacirculationofanoffer,itisan
attempt to induce offers and precedes a definite offer. An invitation to offer is an act precedent to
making an offer.
Q6 State the difference between an Offer and an Invitation to an Offer ?
Ans. Difference between offer and invitation to make an offer:
 IntermsofSection2(a)oftheAct,anofferisthefinalexpressionofwillingnessbytheofferorto
beboundbytheoffershouldtheotherpartychoosestoacceptit.
 On the other hand, offers made with the intention to negotiate or offers to receive offers are
known as invitation to offer.
 Thuswhereapartywithoutexpressinghisfinalwillingnessproposescertaintermsonwhichheis
willingtonegotiatehedoesnotmakeanoffer,butonlyinvitestheotherpartytomakeanoffer
onthose terms.
 Hence the only thing that is required is the willingness of the offeree to abide by the terms of
offer.Ifapersonwhomakesthestatementhastheintentiontobeboundbyitassoonastheother
accepts,heismakinganoffer.
 Thustheintentiontobeboundisimportantfactortobeconsideredindecidingwhetherastatement
is an ‘offer’ or ‘invitation to offer.’
 Followingareinstancesofinvitationtooffertobuyorsell:
(i) Aninvitationbyacompanytothepublictosubscribeforitsshares.
(ii) Displayofgoodsforsaleinshopwindows.
(iii) Advertising auction sales and
(iv) Quotationofpricessentinreplytoaqueryregardingprice.
Chapter-1 : The Indian Contract Act, 1872 - 7 -
Q7 Define An Acceptance. State the Theory of Anson. Also explain the Essentials of A Valid Acceptance?
Ans. Definition of Acceptance:
IntermsofSection2(b)oftheAct,‘thetermacceptance’isdefinedasfollows:
“Whenthepersontowhomtheproposalismadesignifieshisassentthereto,proposalissaidtobeaccepted.
The proposal,when accepted, becomes a promise”.
Theory Of Anson:
Relationship between offer and acceptance:
 AccordingtoSirWilliamAnson“Acceptanceistoofferwhatalightedmatchistoatrainofgunpowder”.
 Theeffectofthisobservationisthatwhatacceptancetriggers cannotberecalledorundone.Butthere
isachoicetothepersonwhohadthetraintoremoveitbeforethematchisapplied.
 Itineffectmeansthattheoffercanbewithdrawnjustbeforeitisaccepted.Acceptanceconvertsthe
offerintoapromiseandthenitistoolatetorevokeit.
 Thismeansassoonasthetrainofgunpowderislighteditwouldexplode.
 TrainofGunpowder[offer]initselfisinert,butitisthelightedmatch[theacceptance]whichcauses
thegunpowdertoexplode.
 Thesignificanceofthisisanofferinitselfcannotcreateanylegalrelationshipbutitistheacceptance
by the offeree which creates a legal relationship.
 Onceanofferisaccepteditbecomesapromiseandcannotbewithdrawnorrevoked.Anofferremains
anoffersolongasitisnotacceptedbutbecomesacontractassoonasitisaccepted.
Legal Rules regarding a valid acceptance
(1) Acceptance can be given only by the person to whom offer is made: Incaseofaspecificoffer,itcanbe
acceptedonlybythepersontowhomitismade.
(2) Acceptance must be absolute and unqualified: Anyconditionalacceptanceoracceptancewithvarying
ortoodeviantconditionsisnoacceptance.Suchconditionalacceptanceisacounterproposalandhas
tobeacceptedbytheproposer,iftheoriginalproposalhastomaterializeintoacontract.
(3) The acceptance must be communicated: Toconcludeacontractbetweentheparties,theacceptance
must be communicated in some perceptible form. Further when a proposal is accepted, the offeree
musthavetheknowledgeoftheoffermadetohim.Ifhedoesnothavetheknowledge,therecanbeno
acceptance.
(4) Acceptance must be in the prescribed mode: Where the mode of acceptance is prescribed in the
proposal,itmustbeacceptedinthatmanner.
(5) Time: Acceptance must be given within the specified time limit, if any, and if no time is stipulated,
acceptancemustbegivenwithinthereasonable timeand before the offerlapses.
(6) Mere silence is not acceptance: Theacceptanceofanoffercannotbeimpliedfromthesilenceofthe
offeree or his failure to answer, unless the offeree has in any previous conduct indicated that his
silence is the evidence of acceptance.
Q8 Explain the Rules regarding communication and revocation of offer and acceptance ?
Ans. TheIndianContractAct,1872givesalotofimportanceto“time”elementindecidingwhentheoffer
and acceptanceiscomplete.
Communication of offer: In terms of Section 4 of the Act, “the communication of offer is complete
when it comes to the knowledge of the person to whom it is made”. This can be explained by an
example. Where ‘A’ makes a proposal to ‘B’ by post to sell his house for ` 5 lakhs and if the letter
containingtheofferispostedon10thMarchandifthatletterreaches‘B’on12thMarchtheofferissaid
tohavebeencommunicatedon12thMarchwhenBreceivedtheletter.
Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting- 8 -
 Communication of acceptance: Communicationofacceptanceiscomplete
(i) As against the proposer, whenitisputinthecourseoftransmissiontohimsoastobeoutofthe
power of the acceptor to withdraw the same;
(ii) As against the acceptor, whenitcomestotheknowledgeoftheproposer.
Acceptance over telephone or telex or fax: When an offeris madeof instantaneous communication
like telex, telephone, fax or through email, the contract is only complete when the acceptance is
received by the offeree, and the contract is made at the place where the acceptance is received
(EntoresLtd.v.MilesFarEastCorporation).However,incaseofacalldropsanddisturbancesintheline,
theremaynotbeavalidcontract.
Revocation
IntermofSection4,communicationofrevocation(oftheproposaloritsacceptance)iscomplete.
(i) asagainstthepersonwhomakesitwhenitisputintoacourseoftransmissiontothepersonto
whom itismadesoastobeoutofthepowerofthepersonwhomakesit,and
(ii) asagainstthepersontowhomitismade, whenitcomestohisknowledge.
Q9 How can An Offer Lapse? State the ways of lapse of an offer?
Ans. Modes of revocation of offer
(i) ByNoticeof Revocation
(ii) ByRejection of offer
(iii) By Lapse of Time: The time for acceptance can lapse if the acceptance isnot given within the
specified time andwhere no timeis specified,then within areasonable time.
(iv) ByNonfulfillmentofconditionprecedent:Wheretheacceptorfailstofulfillaconditionprecedent
toacceptancetheproposalgetsrevoked.
(v) ByDeathorInsanity: Deathorinsanityoftheproposerwouldresultinautomaticrevocationofthe
proposalbutonlyifthefactofdeathorinsanitycomestotheknowledgeoftheacceptor.
(vi) By Counter offer
(vii) ByCrossoffer
(viii) BythenonacceptanceoftheofferaccordingtotheprescribedorusualMode
(ix) By subsequent illegality

CLASS WORK

THEORETICAL QUESTIONS

Q1 “Allcontractsareagreements,but allagreementsare notcontracts”.Comment.

Q2 Define the term “Acceptance’. Discuss the legal provisions relating to communication of acceptance.
Q3 Distinction between Void and Illegal Agreements.

Chapter-1 : The Indian Contract Act, 1872 - 9 -

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting - 10
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UNIT 2: CONSIDERATION

Q10 What is Consideration? State the Essentials of a Valid Consideration?

Ans. Section 2(d) defines consideration as follows:
“When at the desire of the promisor, the promisee or any other person has done or abstained from
doing,ordoesorabstainsfromdoingorpromisestodoorabstainfromdoingsomething,suchanactor
abstinence or promise is called consideration for the promise”.
Essentials Of A Valid Consideration
(i) Consideration must move at the desire of the promisor: Considerationmustbe offered bythe
promiseeorthethirdpartyatthedesireorrequestofthepromisor.Anactdoneatthedesireof
athirdpartyisnotaconsideration.
(ii) Consideration may move from promisee or any other person: InIndia,considerationmayproceed
fromthepromiseeoranyotherpersonwhoisnotapartytothecontract.Inotherwords,therecan
beastrangertoaconsiderationbutnotstrangertoacontract.
Case Law :[Chinnayyavs.Ramayya(1882)]
Anoldladymadeagiftofherpropertytoherdaughterwithadirectiontopayacertainsum of
moneytothematernalunclebywayofannuity.Onthesameday,thedaughterexecutedawriting
infavourofthebrotheragreeingtopayannuity.Thedaughterdidnot,however,paytheannuity
andtheunclesuedtorecoverit.Itwasheldthattherewassufficientconsiderationfortheuncle
torecoverthemoneyfromthedaughter
(iii) Executed and executory consideration: Aconsiderationwhichconsistsintheperformanceofan
act issaidtobeexecuted.Whenitconsistsinapromise,itissaidtobeexecutory.Thepromiseby
onepartymaybetheconsiderationforanactbysomeotherparty,andviceversa.
(iv) Consideration may be past, present or future: Thewords“hasdoneorabstainedfromdoing”[as
contained in Section 2(d)] are a recognition of the doctrine of past consideration. In order to
supportapromise,apastconsiderationmustmovebyapreviousrequest.
(v) Consideration need not be adequate: Consideration need not to be of any particular value. It
neednot beapproximatelyofequalvaluewiththepromiseforwhichitisexchangedbutitmust
besomethingwhichthelawwouldregardashavingsomevalue.Somethinginreturnneednotbe
equaltosomethinggiven.Itcanbeconsideredabadbargainoftheparty.
Butasanexceptionifitisshockinglylessandtheotherpartyallegesthathisconsentwasnotfree
thanthisinadequateconsiderationcanbe takenasanevidenceinsupportofthisallegation
(vi) Performance of what one is legally bound to perform: (considerationmustnotbeperformanceof
existingduty)Theperformanceofanactbyapersonwhoislegallyboundtoperformthesame
cannotbeconsiderationforacontract.Hence,apromisetopaymoneytoawitnessisvoid,forit
is without consideration
(vii) Consideration must be real and not illusory: Considerationmustberealandmustnotbeillusory.
It mustbesomethingtowhichthelawattachessomevalue.Ifitislegallyorphysicallyimpossible
it is not considered valid consideration.
(viii) Consideration must not be unlawful, immoral, or opposed to public policy. Only presence of
considerationisnotsufficientitmustbelawful.Anythingwhichisimmoraloropposedtopublic
policyalsocannotbe valuedasvalidconsideration.
Q11 A Contract without Consideration is Void. State the Exceptions.
Ans. The general rule is that an agreement made without consideration is void. In every valid contract,
consideration is very important. A contract may only be enforceable when consideration is there.
However, the Indian Contract Act contains certain exceptions to this rule. In the following cases, the
agreement though made without consideration, will be valid and enforceable.
Chapter-1 : The Indian Contract Act, 1872 - 13 -
 1. Natural Love and Affection: Conditionstobefulfilledareasunder:
(i) Itmustbemadeoutofnaturalloveandaffectionbetweentheparties.
(ii) Partiesmuststandinnearrelationshiptoeachother.
(iii) Itmustbeinwriting.
(iv) Itmustalso beregisteredunderthelaw.
2. Compensation for past voluntary services: Apromisetocompensate,whollyorinpart,apersonwho
hasalreadyvoluntarilydonesomethingforthepromisor,isenforceable.Inorderthatapromisetopay
forthe past voluntaryservicesbe binding, the following essentialfactors must exist.
(i) The services shouldhave been rendered voluntarily.
(ii) Theservices must havebeen renderedforthe promisor.]
(iii) Thepromisor mustbe in existenceatthetimewhenserviceswererendered.
(iv) Thepromisor musthaveintendedto compensatethepromisee
3. Promise to pay time barred debt: Whereapromiseinwritingsignedbythepersonmakingitorbyhis
authorisedagent,ismadetopayadebtbarredbylimitationitisvalidwithoutconsideration.
4. Agency: Noconsiderationisnecessaryto createanagency.Itmeansanagencydoneforfreewillcreate
avalidcontract.
5. Completed gift: Incaseofcompleted gifts,therulenoconsiderationnocontractdoesnotapply.
6. Bailment: Noconsiderationisrequiredtoeffectthecontractofbailment(Section148).
7. Charity: If a promisee undertakes the liability on the promise of the personto contribute to charity,
therethecontractshallbevalid.
Q12 Explain the Rule of Privity of Contract. Also state the situations in which this Rule does not apply?
Ans. Theaforesaidrule,strangertoacontractcannotsueisknownasa“doctrineofprivityofcontract”,is
however, subject to certain exceptions. In other words, even a stranger to a contract may enforce a
claim in the following cases:
(1) In the case of trust, abeneficiarycanenforcehisrightunderthetrust,thoughhewasnotaparty
tothe contractbetweenthesettlerandthetrustee.
(2) In the case of a family settlement, if theterms of the settlement are reduced intowriting,the
members of family who originally had not been parties to the settlement may enforce the
agreement.
(3) In the case of certain marriage contracts, afemalemembercanenforceaprovisionformarriage
expenses made on the partition of theHindu Undivided Family.
(4) In the case of assignment of a contract, whenthebenefitunderacontracthasbeenassigned,the
assigneecanenforcethecontract.
(5) Acknowledgment or estoppel – wherethepromisorbyhisconductacknowledgeshimselfasan
agentofthethirdparty,itwouldresultintoabindingobligationtowardsthirdparty.
(6) Contracts entered into through an agent: Theprincipalcanenforcethecontractsenteredbyhis
agentwheretheagenthasactedwithinthescopeofhisauthorityandinthenameoftheprincipal.

CLASS WORK

THEORETICAL QUESTIONS

Q1 Define consideration. State the characteristics of a valid consideration.

Q2 “No Consideration, no contract” Comment.
Q3 “To form a valid contract,consideration must be adequate”. Comment.

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UNIT 3: OTHER ESSENTIAL ELEMENTS OF A CONTRACT

Q13 What is the position of minor as per Indian Contract Act, 1872?
Ans. Age of Majority: In India, the age of majority is regulated by the Indian Majority Act, 1875.
EverypersondomiciledinIndiashallattaintheageofmajorityonthecompletionof18yearsofageand
not before.
Law relating to Minor’s agreement/Position of Minor
1. A contract made with or by a minor is void abinitio: Aminorisnotcompetenttocontractandany
agreementwithorbyaminorisvoidfromtheverybeginning.
Case Law:MohiriBibivs.DharmoDasGhosh“A,aminorborrowed`20,000fromBandasasecurity
forthesameexecutedamortgageinhisfavour.Hebecameamajorafewmonthslaterandleda
suit for the declaration that the mortgage executed by him during his minority was void and
shouldbecancelled.ItwasheldthatamortgagebyaminorwasvoidandBwasnotentitledto
repayment of money.
2. No ratification after attaining majority: Aminorcannotratifytheagreementonattainingmajority
as theoriginalagreementisvoidabinitioandavoidagreementcanneverberatified.
3. Minor can be a beneficiary: Thoughaminorisnotcompetent tocontract,nothingintheContract
Actpreventshimfrommakingtheotherpartyboundtotheminor.Thus, Aminorcannotbecome
partnerinapartnershipfirm.However,hemaywiththeconsentofallthepartners,beadmitted
to the benefits of partnership.
4. A minor can always plead minority: Aminorcanalwayspleadminorityandisnotstoppedtodo so
evenwherehehastakenanyloanorenteredintoanycontractbyfalselyrepresentingthathewas
major.Ruleofestoppelcannotbeappliedagainstaminor.Itmeanshecanbeallowedtopleahis
minority in defence.
5. Liability for necessaries: A claim for necessaries supplied to a minor is enforceable by law. But
thereisnopersonalliability oftheminor,butonlyhisproperty isliable.
To render minor’s estate liable for necessaries two conditions must be satisfied.
(i) The contractmustbeforthegoodsreasonablynecessaryforhissupportinthestationin
life.
(ii) Theminormustnothavealreadyasufficientsupplyofthesenecessaries.
6. Contract by guardian  how far enforceable: Thoughaminor’sagreementisvoid,hisguardiancan,
under certain circumstances enter into avalid contract on minor’s behalf. Where the guardian
makesacontractfortheminor,whichiswithinhiscompetenceandwhichisforthebenefitofthe
minor,there willbe validcontractwhichtheminorcanenforce.
7. No specific performance: Aminor’sagreementbeingabsolutelyvoid,therecanbenoquestionof
the specificperformance ofsuch an agreement.
8. No insolvency: Aminorcannotbedeclaredinsolventasheisincapableofcontractingdebtsand
dues arepayablefromthe personalpropertiesofminorandheisnotpersonallyliable.
9. Minor can be an agent: Aminorcanactasanagent.Buthewillnotbeliabletohisprincipalforhis
acts. Aminorcandraw,deliverandendorsenegotiableinstrumentswithouthimselfbeingliable.
10. Liability for torts: Atortisacivilwrong.Aminorisliableintortunlessthetortinrealityisabreach
ofcontract
Chapter-1 : The Indian Contract Act, 1872 - 17 -
Q14 What do we understand by Free Consent. Also state the situations when consent of party is not free?
Ans. AspertheprovisionsofIndianContractAct,1872“two or more persons are said to consent when they
agree upon the same thing in the same sense.”Consentissaidtobefreewhenitisnotcausedby:
1. Coercion
2. Undue Influence
3. Fraud
4. Misrepresentation
5. Mistake.
When consent toan agreementis caused bycoercion,fraud, misrepresentation, or undue influence,
theagreementisacontractvoidableattheoptionofthepartywhoseconsentwassocaused.Whenthe
consentisvitiated bymistake,thecontract becomesvoid.
(I) Coercion (Section 15)
“Coercion’isthecommitting,orthreateningtocommit,anyactforbiddenbytheIndianPenalCodeor
theunlawfuldetaining,orthreateningtodetainanyproperty,totheprejudiceofanypersonwhatever,
withtheintentionofcausinganypersontoenterintoanagreement.”
(II) Undue influence (Section 16)
“A contract is said to be induced by ‘undue influence’ where the relations subsisting between the
partiesaresuchthatoneofthepartiesisinapositiontodominatethewilloftheotherandheusesthat
positiontoobtainanunfairadvantageovertheother”.
Apersonisdeemedtobeinpositiontodominatethewillofanother:
(a) Whereheholdsarealorapparentauthorityovertheother;or
(b) Wherehestandsinafiduciaryrelationshiptotheother;or
(c) Wherehemakesacontractwithapersonwhosementalcapacityistemporarilyorpermanently
affectedbyreasonofage,illnessormentalorbodilydistressforexample,anoldilliterateperson.
(III) Fraud (Section 17)
‘Fraud’meansandincludesanyofthe followingacts committedby a partyto a contract, orwith his
connivance,orbyhisagent,withanintenttodeceiveanotherpartytheretoorhisagent,ortoinduce
himtoenterintothecontract:
(1) thesuggestion,asafact,ofthatwhichisnottrue,byonewhodoesnotbelieveittobetrue;
(2) theactiveconcealmentofafactbyonehavingknowledgeorbeliefofthefact;
(3) apromisemadewithoutanyintentionofperformingit;
(4) anyotheractfittedtodeceive;
(5) anysuchactoromissionasthelawspeciallydeclarestobefraudulent.
Effect of Fraud upon validity of a contract: Whentheconsenttoanagreementincausedbythefraud,
the contractisvoidableatoptionofthepartydefraudedandhehasthefollowingremedies:
(1) Hecanrescindthecontractwithinareasonabletime.
(2) Hecansuefordamages.
(3) He can insist on the performance of the contract on the condition that he shall be put in the
positioninwhichhe would have beenhad therepresentationmade beentrue.
Mere silence is not fraud
A party to the contract is under noobligation to disclose the whole truth to the other party. ‘Caveat
Emptor’i.e. let the purchaser bewareistherule applicable to contracts.Thereis nodutytospeak in
suchcasesandsilencedoesnotamounttofraud.Similarlythereisnodutytodisclosefactswhichare
within the knowledge of boththe parties.

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 Meresilenceastofactslikelytoaffectthewillingnessofapersontoenterintoacontractisnotfraud,
unlessthecircumstancesofthecasearesuchthat,regardbeinghadtothem,itisthedutyoftheperson
keeping silence to speak, or unless his silence is, in itself, equivalent to speech.
(IV) Misrepresentation (Section 18)
Misrepresentation means and includes 
(1) thepositiveassertion,inamannernotwarrantedbytheinformationofthepersonmakingit,of
thatwhichisnottrue,thoughhebelievesittobetrue;
(2) any breach of duty which, without an intent to deceive, gains an advantage to the person
committingit, or any one claiming under him; by misleading another to his prejudice or tothe
prejudice of anyone claimingunderhim;
(3) causing,however,innocently,aparty toanagreementtomakeamistakeastothesubstanceof
thethingwhichisthesubjectoftheagreement.
Legal effects of agreements without free consent  (Section 19)
Whenconsenttoanagreementiscausedbycoercion,fraudormisrepresentation,theagreementisa
contractvoidableattheoptionofthepartywhoseconsentwassocaused.
(v) Mistake: Mistake means innocent or erroneous belief which leads the party to misunderstand the
others. Mistake may be either Bilateral or Unilateral.
Bilateralmistakeiswhenboththepartiestoacontractareunderamistake.
Unilateralmistakeiswhenonlyonepartytothecontractisunderamistake.
Effect of mistake on validity of a contract:
Mistake is some unintentional act, omission or error, arising from unconsciousness, ignorance or
forgetfulness, imposition or misplaced confidence. It may be of two kinds
(i) Mistake of Law: Amistakeoflawdoesnotrenderacontractvoidasonecannottakeexcuseof
ignorance ofthelawofhisowncountry.Butifthemistakeoflawiscausedthroughtheinducement
ofanother,thecontractmaybeavoided.Mistakeofforeignlawisexcusableandistreatedlikea
mistakeoffact.Contractmaybeavoidedonsuchmistake.
(ii) Mistake of fact: Wherethecontractingpartiesmisunderstoodeachotherandareatcrosspurposes,
there is a bilateral or mutual mistake. Where both the parties to an agreement are under a
mistakeastoamatteroffactessentialtotheagreement,theagreementisvoid.
Q15 In which cases the object and consideration is considered to be unlawful?
Ans. Theconsiderationorobjectof anagreementislawful, unless
1. Itisforbiddenbylaw;or
2. Isofsuchanaturethat,ifpermitted,itwoulddefeattheprovisionsofanylaw;or
3. Is fraudulent; or
4. Involvesinjurytothepersonorpropertyofanother;or
5. Thecourtregardsitasimmoral;or
6. Opposed to public policy.
Ineachofthesecases,theconsiderationorobjectofanagreementissaidtobeunlawful.Every
agreement of whichtheobjector considerationisunlawfulisvoid.
Q16 State the Agreements that are opposed to public policy?
Ans. FollowingaretheAgreements opposed to public policy

Chapter-1 : The Indian Contract Act, 1872 - 19 -

 (1) Trading with enemy: AnytradewithpersonowingallegiancetoaGovernmentatwarwithIndia
withoutthelicenceoftheGovernmentofIndiaisvoid,astheobjectisopposedtopublicpolicy.
(2) Stifling Prosecution: Anagreementtostifleprosecutioni.e.“anagreementtopresentproceedings
alreadyinstituted fromrunningtheir normalcourseusing force”tends tobeaperversion or an
abuseofjustice;therefore,suchanagreementisvoid.Theprincipleisthatoneshouldnotmake
a trade of felony.
(3) Maintenance and Champerty: Maintenanceisanagreementinwhichapersonpromisestomaintain
suitinwhichhehasnointerest.
Champertyisanagreementinwhichapersonagreestoassistanotherinlitigationinexchangeof
apromisetohandoveraportionoftheproceedsoftheaction.
(4) Traffic relating to Public Offices: An agreement to traffic in public office is opposed to public
policy, as it interferes with the appointment of a person best qualified for the service of the
public.Publicpolicyrequires that there should be nomoneyconsiderationfortheappointment
toanoffice inwhichthepublicisinterested.
(5) Agreements tending to create monopolies: Agreementshavingfortheirobjecttheestablishment
of monopoliesare opposedto public policy andthereforevoid.
(6) Marriage brokerage agreements: Anagreementtonegotiatemarriageforreward,whichisknown
as amarriagebrokeragecontract,isvoid,asitisopposedtopublicpolicy.Forinstance,anagreement
topaymoneytoapersonhiredtoprocureawifeisopposedtopublicpolicyandthereforevoid.
(7) Interference with the course of justice: An agreement whose object is to induce any judicial
officerof theStatetoactpartiallyorcorruptlyisvoid,asitisopposedtopublicpolicy.Anagreement
which contemplates the use of underhand means to influence legislation is void.
(8) Interest against obligation: Thefollowingareexamplesofagreementthatarevoidastheytendto
createan interestagainst obligation. The object of such agreements is opposedtopublic policy.
An agreement by an agent to receive without his principal’sconsent compensation from
anotherfortheperformanceofhisagencyisinvalid.
A, who is the manager of a firm, agrees to pass a contract to X if X pays to A `200,000
privately;theagreementisvoid.
(9) Consideration Unlawful in Part: Thegeneralruleisthatwherethelegalpartofacontractcanbe
severedfromtheillegalpart,thebadpartmayberejectedandthegoodonecanberetained.But
wheretheillegalpartcannotbesevered,thecontractisaltogethervoid.
(10) Agreement in restraint of marriage: Everyagreementinrestraintofmarriageofany personother
thanaminor,isvoid.Soifaperson,beingamajor,agreesforgoodconsiderationnottomarry,the
promiseis notbindingand consideredas void agreement.
(11) Agreement in restraint of trade (Section 27): An agreement by which any person is restrained
from exercisingalawfulprofession,tradeorbusinessofanykind,istothatextentvoid.Butthis
rule is subject to the following exceptions:
(1) Where aperson sells thegoodwillof abusinessandagreeswiththebuyerto refrainfrom
carryingonasimilarbusiness,withinspecifiedlocallimits,solongasthebuyerorhissuccessor
in interest carries on a like business therein, such an agreement is valid (goodwill is the
advantageenjoyedbyabusinessonaccountofpublicpatronageandencouragementfrom
habitual customers). The local limits within which the seller of the goodwill agrees not to
carryon similar businessmustbe reasonable.

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 (2) The Indian Partnership Act, 1932 if an outgoing partner makes an agreement with the
continuingpartnersthathewillnotcarryonanybusinesssimilartothatofthefirmwithina
specified period orwithin specifiedlocal limits,suchan agreement,thoughtinrestraint of
trade,willbevalid,iftherestrictionsimposedarereasonable.Similarly,underSection11of
that Act an agreement between partners not to carry on competing business during the
continuance of partnership is valid.
(3) An agreement of service by which an employee binds himself, during the term of his
agreement,nottocompetewithhisemployerisnotinrestraintoftrade.
(12) Agreement in restraint of legal proceedings: Anagreementinrestraintoflegal proceedingisthe
onebywhichanypartytheretoisrestrictedabsolutelyfromenforcinghisrightsunderacontract
throughaCourtorwhichabridgestheusualperiodforstartinglegalproceedings.Acontractofthis
nature is void.
Q17 What do we understand by Wagering Agreements? Explain with examples?
Ans. Wagering agreement (Section 30):Anagreementbywayofawagerisvoid.Itisanagreementinvolving
paymentofasumofmoneyuponthedeterminationofanuncertainevent.Theessenceofawageris
that each side should standto win or lose, depending on the way an uncertain event takes place in
reference to which the chance is taken and in the occurrence of which neither of the parties has
legitimate interest.
Essentials of a Wager
1. Theremustbeapromisetopaymoneyormoney’sworth.
2. Promisemustbeconditional onanevent happieningornot happening.
3. There mustbe uncertaintyof event.
4. Theremustbetwoparties,eachpartymuststandtowinorlose.
5. Theremustbecommonintentiontobetatthetimingofmakingsuchagreement.
6. Partiesshouldhavenointerestin theeventexceptforstake.
Transactions similar to Wager
(i) Lottery transactions: Alotteryisagameofchanceandnotofskillorknowledge.Wheretheprime
motiveofparticipantisgambling,thetransactionamountstoawager.
(ii) Crossword Puzzles and Competitions: Crossword puzzles in which prizes depend upon the
correspondence of the competitor’s solution with a previously prepared solution kept with the
editorofanewspaperisalotteryandtherefore,awageringtransaction.
(iii) Speculative transactions: Anagreementorasharemarkettransactionwherethepartiesintendto
settlethedifferencebetweenthecontractpriceandthemarketpriceofcertaingoodsorshares
onaspecifiedday,isagamblingandhencevoid.
(iv) Horse Race Transactions: Ahorseracecompetitionwhereprizepayabletothebetwinnerisless
than `500,isawager.
Transactions resembling with wagering transaction but are not void
(i) Chit fund: Chit fund does not come within the scope of wager. In case of a chit fund, a certain
number of persons decide to contribute affixed sum for a specified period and at the end of a
month,theamountsocontributedispaidtotheluckywinneroftheluckydraw.

Chapter-1 : The Indian Contract Act, 1872 - 21 -

 (ii) Commercial transactions or share market transactions: Inthesetransactionsinwhichdeliveryof
goodsorsharesisintendedtobegivenortaken,donotamounttowagers.
(iii) Games of skill and Athletic Competition: Crossword puzzles, picture competitions and athletic
competitionswhereprizesareawardedonthebasisofskillandintelligencearethegamesofskill
and hence suchcompetitionare valid.
(iv) A contract of insurance: Acontractofinsuranceisatypeofcontingentcontractandisvalidunder
law and these contracts are different from wageringagreements.

CLASS WORK

THEORETICAL QUESTIONS

Q1 “Meresilencedoesnotamounttofraud”.Discuss.
Q2 “Thoughaminorisnotcompetenttocontract,nothingintheContractActpreventshimfrommaking
theotherpartyboundtotheminor”.Discuss.
Q3 “Anagreement,themeaningofwhichisnotcertain,isvoid”.Discuss.
Q4 Whoaredisqualifiedpersonstodothecontract?

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UNIT 4: PERFORMANCE OF CONTRACT

Q18 Performance of the contract can only be done by Promisor. Comment on the Statement?
Ans. Thepromiseunderacontractmaybe performed,as thecircumstancesmay permit,bythepromisor
himself, or by his agent or his legal representative.
1. Promisor himself: Thecontractswhichinvolvetheexerciseofpersonalskillordiligence,orwhich
are founded on personal confidence between the parties must be performed by the promisor
himself.
2. Agent: Where personal consideration is not the foundation of a contract,the promisor or his
representativemay employa competent persontoperformit.
3. Legal Representatives: Legalrepresentativesofthedeceasedpromisorareboundtoperformit.
But their liability under a contract is limited to the value of the property they inherit from the
deceased.
4. Third persons: When a promisee accepts performance of the promise from a third person, he
cannotafterwards enforceit against the promisor.
5. Joint promisors: (Section 42) : Whentwoormorepersonshavemadeajointpromise,thenunless
a contrary intentionappears bythecontract, all such persons must jointly fulfill thepromise. If
any of them dies, his legal representatives must, jointly with the surviving promisors, fulfill the
promise.
Q19 What are the types of Performance? What is the effect of refusal to accept offer of Performance?
Ans. Actual Performance: Whereapartytoacontracthasdonewhathehadundertakentodooreitherof
the parties have fulfilled their obligations under the contract within the time and in the manner
prescribed.
Offer to perform or attempted performance or tender of performance: It may happen sometimes,
when theperformancebecomesdue,thepromisorofferstoperformhisobligationbutthepromisee
refusestoaccepttheperformance.
Effect of refusal to accept offer of performance:Whereapromisorhasmadeanofferofperformance
to the promisee, and the offer has not been accepted, then the promisor is not responsible for non
performance,nordoeshetherebylosehisrightsunderthecontract.
Q20 Distinguish between succession and assignment?
Ans. Distinction between two legal concepts, viz., succession and assignment
Succession
 Whenthebenefitsofacontractaresucceededtobyprocessoflaw,thenbothburdenandbenefits
attachingto thecontract,maysometimesdevolveonthelegalheir.
 Suppose, a son succeeds to the estate of his father after his death, he will be liable to pay the
debts and liabilities of his father owed during his lifetime.
 Butifthedebtsowedbyhisfatherexceedthevalue ofthe estateinheritedbythesonthenhe
wouldnotbecalledupontopaytheexcess.
 Inotherwords,the liabilityofthesonwillbelimited to the extent ofthepropertyinherited by
him.

Chapter-1 : The Indian Contract Act, 1872 - 25 -

 Assignment
 Thebenefitofacontractcanonlybeassignedbutnotthe liabilitiesthereunder.
 Thisis because whenliability isassigned,a third party gets involved therein.
Thusa debtorcannotrelieve himselfofhisliabilitytocreditorby assigningtosomeone elsehis
obligationtorepay thedebt.
Q21 State the liability of Joint Promisors and Promisees?
Ans. Devolution of joint liabilities (Section 42)
 Whentwoormorepersonshavemadeajointpromise,then,unlessacontraryintentionappears
bythecontract, allsuchpersons,during theirjointlivesandafterthedeathofanyofthem,his
representative jointly with the survivor or survivors and after the death of last survivor, the
representatives of all jointly, must fulfil the promise
 When twoormore persons makea joint promise, thepromiseemay,inthe absenceofexpress
agreementtothecontrary,compelanyoneormoreofsuchjointpromisorstoperformthewhole
of the promise.
 Eachoftwoormorejointpromisorsmaycompeleveryother jointpromisortocontributeequally
with himself to the performance of the promise, unless a contrary intention appears from the
contract.
 Itmeans ifone of the joint promisorsis made to perform thewhole contract, he can call fora
contribution from others.
 Wheretwoormorepersonshavemadeajointpromise,areleaseofoneofsuchjointpromisors
by thepromiseedoesnotdischargetheotherjoint promisor orjoint promisors,neitherdoes it
freethejointpromisorssoreleasedfromresponsibilitytotheotherjointpromisororpromisors.
 Ifanyoneoftwoormorejointpromisorsmakesdefault insuchcontribution,theremainingjoint
promisorsmustbearthelossarisingfromsuchdefaultinequalshares.
Rights of Joint Promisees
 “When a person has made a promise to two or more persons jointly, then unless a contrary
intention appears from the contract,the right to claim performance rests,as between him and
them,withthemduringtheirjointlives,andafterthedeathofanyofthem,withtherepresentative
of such deceased person jointly with the survivor or survivors, and after the death of the last
survivor, with the representatives of all jointly”.
Q22 State the rules regarding performance of Reciprocal Promises?
Ans.
(1) Order of performance of reciprocal promises
Whentheorderofperformanceofthereciprocalpromisesisexpresslyfixedbythecontract,theyshall
beperformed inthatorder;andwheretheorderisnotexpresslyfixedbythecontract, theyshall be
performedinthatorderwhichthenatureofthetransactionrequires.
(2) Liability of party preventing event on which the contract is to take effect
Whenacontractcontainsreciprocalpromises,andonepartytothecontractpreventstheotherfrom
performinghispromise,thecontractbecomesvoidableattheoptionofthepartysoprevented;and
heisentitledtocompensationfromtheotherpartyforanylosshemaysustaininconsequenceofthe
nonperformanceofthecontract.

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 (3) Effect of default as to that promise which should be rest performed, in contract consisting of reciprocal
promises
Whenacontractconsistsofreciprocalpromises,suchthatoneofthemcannotbeperformed,orthatits
performance cannot be claimed till the other has been performed, and the promisor of the promise
last mentioned fails to perform it, such promisor cannot claim the performance of the reciprocal
promise,andmustmakecompensationtotheotherpartytothecontractforanylosswhichsuchother
partymaysustainbythenonperformanceofthecontract.
(4) Effect of Failure to Perform at a Time Fixed when Time is Essential
“Whenapartytoacontractpromisestodocertainthingatorbeforethespecifiedtime,andfailstodo
anysuchthingatorbeforethespecifiedtime,thecontract,orsomuchofitashasnotbeenperformed,
becomesvoidableattheoptionofthepromisee,iftheintentionofthepartieswasthattimeshouldbe
ofessenceof the contract”.
(5) Effect of such failure when time is not essential
Ifit wasnottheintention of thepartiesthattimeshouldbeofessenceofthecontract,thecontract
does not become voidable by the failure to do such thing at or before the specified time; but the
promiseeisentitledtocompensationfromthepromisorforanylossoccasionedtohimbysuchfailure.
(6) Reciprocal promise to do certain things that are legal, and also some other things that are illegal
Where persons reciprocally promise, rest to do certain things which are legal and secondly, under
specifiedcircumstances,todocertainotherthingswhichareillegal,therestsetofpromisesisavalid
contract,butthesecondisavoidagreement
Q23 Explain the concept of Impossibility in detail? Also state the Types of Impossibilities?
Ans. “Anagreementto doanactimpossibleinitselfis void”.
Acontracttodoanactwhich,after thecontractismade,becomesimpossible,or,byreasonofsomeevent
whichthepromisorcouldnotprevent,unlawful,becomesvoidwhentheactbecomesimpossibleorunlawful.
Theimpossibilityofperformancemaybeofthetwotypes,namely(a)initialimpossibility,and(b)subsequent
impossibility.
(1) Initial Impossibility (Impossibility existing at the time of contract): Whenthepartiesagree upondoing
ofsomethingwhichisobviouslyimpossibleinitselftheagreementwouldbevoid.Impossibleinitself
meansimpossibleinthenatureofthings.Thefactofimpossibilitymaybeandmaynotbeknowntothe
parties.
 If known to the parties: Itwouldbeobservedthatanagreementconstituted,quiteunknown to
theparties, may be impossible of beingperformedand hence void.
 If unknown to the parties: Where both the promisor and the promisee are ignorant of the
impossibility of performance, the contract is void.
 If known to the promisor only: Whereatthetimeofenteringintoacontract,thepromisoralone
knows about the impossibility of performance, or even if he does not know though he should
haveknownitwithreasonablediligence,thepromiseeisentitledtoclaimcompensationforany
losshesufferedon accountof nonperformance.
(2) Subsequent or Supervening impossibility (Becomes impossible after entering into contract):
 When performance of promise become impossible or illegal by occurrence of an unexpected
eventorachangeofcircumstancesbeyondthe contemplationofparties,thecontractbecomes
void.

Chapter-1 : The Indian Contract Act, 1872 - 27 -

 Â Sometimes, the performance of a contract is quite possible when it is made. But subsequently,
some event happens which renders the performance impossible or unlawful. Such impossibility
is called the subsequent or supervening.
 It is also called the postcontractual impossibility.
 Theeffectofsuchimpossibilityisthatitmakesthecontractvoid,and thepartiesaredischarged
fromfurtherperformanceofthecontract.
Q24 State the rule of Appropriation of payment?
Ans. Sometimes,adebtorowesseveraldebtstothesamecreditorandmakespayment,whichisnotsufficient
todischargeallthedebts.Insuchcases,thepaymentisappropriatedasfollows:
(i) Application of payment where debt to be discharged is indicated: Whereadebtor, owingseveral
distinct debts to one person, makes a payment to him either with express intimation or under
circumstances implying that the payment is to be applied to the discharge of some particular
debt, the payment, if accepted, must be applied accordingly.
(ii) Application of payment where debt to be discharged is not indicated: Where the debtor has
omittedtointimateandtherearenoothercircumstancesindicatingtowhichdebtthepaymentis
to be applied the creditor may apply it at his discretion to any lawful debt actually due and
payabletohimfromthedebtor,whereitsrecoveryisorisnotbarredbythelawinforceforthe
timebeingasto thelimitationofsuits.
(iii) Application of payment where neither party appropriates (Section 61): Whereneitherpartymakes
anyappropriation,thepaymentshallbeappliedindischargeofthedebtsinorderoftime,whether
theyareorarenotbarredbythelawinforceforthetimebeingastothelimitationofsuits.Ifthe
debtsareofequalstanding,thepaymentsshall beappliedindischargeofeachproportionately
Q25 How the contract is discharged by mutual agreement?
Ans. Acontractisdischargedbymutualagreementinthefollowingways:
“Ifthepartiestoacontractagreetosubstituteanewcontractforit,ortorescindoralterit,theoriginal
contractneednotbeperformed”
 Novation: Thepartiestoacontractmaysubstituteanewcontractfortheold.Iftheydoso,it will
beacaseofnovation.Onnovation,theoldcontractisdischargedandconsequentlyitneednotbe
performed.
 Rescission: A contract is also discharged by rescission. When the parties to a contract agree to
rescindit,thecontractneednotbeperformed.Inthecaseofrescission,onlytheoldcontractis
cancelledandnonewcontractcomestoexistinitsplace.
 Alteration: Thetermsofcontractmaybesoalteredbymutualagreementthatthealterationmay
have the effect of substituting a new contract for the old one. In other words, the distinction
between novation and alteration is very slender.
Difference between Novation and alteration:
Novation
Itmeanssubstitutionofanexistingcontractwithanewone.
Novationmaybebetweensamepartiesortheremaybeachangeinthecontractingparties.
Incaseofnovationthereisaltogetherasubstitutionofnewcontractinplaceoftheoldcontract.
Alteration
Alterationthe terms of thecontract may bealteredby mutual agreement bythecontractingparties
Butthepartiestothecontractwillremainthesame.
Incaseofalterationitisnotessentialtosubstituteanewcontractinplaceoftheoldcontract.
Inalteration,theremaybeachangeinsomeofthetermsandconditionsoftheoriginalagreement.

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 Â Remission or Waiver: “Every promisee may dispense with or remit, wholly or in part, the
performanceofthepromisemadetohim,ormayextendthetimeforsuchperformanceormay
acceptinsteadofitanysatisfactionwhichhethinkst”.Inotherwords,acontractmaybedischarged
by remission.
Q26 State the ways of Discharge of Contract?
Ans. Acontractisdischargedwhentheobligationscreatedbyitcometoanend.Acontractmaybedischarged
inanyoneofthefollowingways:
1. Discharge by performance: Ittakesplacewhenthepartiestothecontractfulfiltheirobligationsarising
underthecontractwithinthetimeandinthemannerprescribed.Dischargebyperformancemaybe
(1) Actual performance; or
(2) Attempted performance.
2. Discharge by mutual agreement: TheIndianContractActprovidesifthepartiesto acontractagreeto
substitute a new contract for it, or to rescind or remit or alter it, the original contract need not be
performed. The principles of Novation, Rescission, Alteration and Remission are already discussed in
previous question.
3. Discharge by impossibility of performance: Theimpossibilitymayexistfromtheverystart.Inthat case,
it would be impossibility ab initio. Alternatively, it may supervene. Supervening impossibility may
takeplaceowingto:
 Change in law
 Destructionof thesubjectmatter essentialto thatperformance
 Nonexistence or nonoccurrence ofparticular state of things
 Declarationofawar
4. Discharge by lapse of time: Acontractshouldbeperformedwithinaspecifiedperiodasprescribed by
the Limitation Act, 1963. If it is not performed and if no action is taken bythe promisee within the
specified period of limitation, he is deprived of remedy at law.
5. Discharge by operation of law: A contract maybe dischargedby operation of law whichincludes by
death of the promisor, by insolvency etc.
6. Discharge by breach of contract: Breachofcontractmaybeactualbreachofcontractoranticipatory
breachofcontract.
 If one party defaults in performing his partof the contract on the due date, he is said to have
committed breach thereof.
 Ontheotherhand,apersonrepudiatesacontractbeforethestipulatedtimeforitsperformance
hasarrived,heisdeemedtohavecommittedanticipatorybreach.
 Ifoneofthepartiestoacontractbreaksthepromisethepartyinjuredthereby,hasnotonlyaright
ofactionfordamagesbutheisalsodischargedfromperforminghispartofthecontract.

CLASS WORK

THEORETICAL QUESTIONS
Q1 “Thebasicruleisthatthepromisormustperformexactlywhathehaspromisedtoperform.”Explain
statingtheobligationofpartiestocontracts.
Q2 Discusstheeffectofacceptingperformancefromthirdperson.
Q3 “Whenapartytoacontracthasrefusedtoperform,ordisabledhimselffromperforminghispromisein
itsentirety, thepromiseemayputanendtothecontract”.Explain.

Chapter-1 : The Indian Contract Act, 1872 - 29 -

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UNIT 5: BREACH OF CONTRACT AND ITS REMEDIES

Q27 What do we understand by Breach of Contract. Also state the types of Breach of Contract?
Ans. Breachmeansfailureofapartytoperformhisorherobligationunderacontract.Breachofcontract
mayariseintwoways:
(1) Actualbreachofcontract
(2) Anticipatorybreachofcontract
Actual breach of contractmaybecommitted
(a) Atthetimewhentheperformanceofthecontractisdue:Herebreachhasbeencommittedatthe
time when the performance becomes due.
(b) Duringtheperformanceofthecontract:Herebreachofcontractoccursduringtheperformanceof
thecontract,onepartyfailsorrefusestoperformhisobligationunderitbyexpressorimpliedact.
Anticipatory breach of contractisabreachofcontractoccurringbeforethetimefixedforperformance
hasarrived.Whenthepromisorrefusesaltogethertoperformhispromiseandsignifieshisunwillingness
evenbeforethetimeforperformancehasarrived,itiscalledAnticipatoryBreach.
Anticipatorybreachofacontractmaytakeeitherofthefollowingtwoways:
(a) Expressly bywordsspokenorwritten,and
(b) Impliedlybytheconductofoneoftheparties.
Effect of Anticipatory Breach: Thepromiseeisexcusedfromperformanceorfromfurtherperformance.
Furtherhegetsanoption:
(1) To either treat the contract as “rescinded and sue the other party for damages from breach of
contract immediately without waiting until the duedate ofperformance;
or
(2) Hemayelect notto rescindbutto treatthecontractasstill operative,andwaitforthetimeof
performanceandthenholdtheotherpartyresponsiblefortheconsequencesofnonperformance.
Q28 What are the remedies for Breach of Contract? Also state if the party is entitled to damages for Breach
of Contract?
Ans. ThefollowingaretheremediesforBreachofContract:
(1) Rescission of contract: Whenacontractisbrokenbyoneparty,theotherpartymaytreatthecontract as
rescinded. In such a case he is absolved of all his obligations under the contract and is entitled to
compensationfor anydamages thathemight havesuffered.
(2) Quantum Meruit: Whereonepersonhasrenderedservicetoanotherincircumstanceswhichindicate
anunderstandingbetweenthemthatitistobepaidforalthoughnoparticularremunerationhasbeen
fixed,thelawwillinferapromisetopay.Quantum Meruiti.e.asmuchasthepartydoingtheservice
has deserved.
For theapplication of this doctrine, two conditions must be fulfilled:
(1) Itisonlyavailableiftheoriginalcontracthasbeendischarged.
(2) Theclaimmustbebroughtbyapartynotindefault.

Chapter-1 : The Indian Contract Act, 1872 - 33 -

 Theobjectofallowingaclaimonquantummeruitistorecompensatethepartyorpersonforvalueof
workwhichhehasdone.
The claim for quantum meruit arises in the following cases:
(a) Whenanagreementisdiscoveredtobevoidorwhenacontractbecomesvoid.
(b) Whensomethingis donewithoutanyintention todoso gratuitously.
(c) Wherethereisanexpressorimpliedcontracttorenderservicesbutthereisnoagreementasto
remuneration.
(d) Whenonepartyabandonsorrefusestoperformthecontract.
(e) Where a contract is divisible and the party not in default has enjoyed the bene t of part
performance.
(f) Whenanindivisiblecontractforalumpsumiscompletelyperformedbutbadlythepersonwho
hasperformedthecontractcanclaimthelumpsum,buttheotherpartycanmakeadeductionfor
badwork.
(3) Suit for specific performance: Where damagesare notanadequateremedy inthecaseof breach of
contract,thecourtmayinitsdiscretiononasuitforspecificperformancedirectpartyinbreach,tocarry
outhispromiseaccordingtothetermsofthecontract.
(4) Suit for injunction: Whereapartytoacontractisnegatingthetermsofacontract,thecourtmayby
issuingan‘injunctionorders’,restrainhimfrom doingwhathepromisednot todo.
(5) Damages: Remedy by way of Damages or Kind of Damages
Itentitles the injured partytorecover compensation for the loss suffered byit due to the breach of
contract, fromthepartywhocausesthe breach.Thedamages which maybeawardedto theinjured
partymaybeof thefollowingkinds:
(i) Ordinary damages: When a contract has been broken, the partywho suffers by such breach is
entitled to receive, from the party who has broken the contract, compensation for any loss or
damage cause to him thereby, which naturally arose in the usual course of things from such
breach.
Such compensation is not to be given for any remote and indirect loss or damage sustained by
reasonsofthebreach.
(ii) Special damages: Whereapartytoacontractreceivesanoticeofspecialcircumstancesaffecting
the contract,hewillbeliablenotonlyfordamagesarisingnaturallyanddirectlyfromthebreach
butalsoforspecialdamages.
(iii) Vindictive or Exemplary damages
Thesedamagesmaybeawardedonlyintwocases
(a) forbreachofpromisetomarrybecauseitcausesinjurytohisorherfeelings;and
(b) forwrongfuldishonourbyabankerofhiscustomer’schequebecauseinthiscasethe
injuryduetowrongfuldishonourtothedrawerofchequeissoheavythatitcausesloss
ofcreditandreputationtohim
(iv) Nominal damages: Nominaldamagesareawardedwheretheplaintiffhasprovedthattherehas
been abreachofcontractbuthehasnotinfactsufferedanyrealdamage.Itisawardedjustto
establishtherighttodecreeforthebreachofcontract.Theamountmaybearupeeoreven10
paise.

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 (v) Damages for deterioration caused by delay: Inthecaseofdeteriorationcausedtogoodsbydelay,
damages can be recovered from carrier even without notice. The word ‘deterioration’ not only
impliesphysicaldamagestothegoodsbutitmayalsomeanlossofspecialopportunityforsale.
(vi) Pre fixed damages: Sometimes,partiestoacontractstipulateatthetimeofitsformationthaton
abreachofcontractbyanyofthem,acertainamountwillbepayableasdamage.Itmayamountto
either liquidated damages ora penalty.
Q29 What is the difference between Liquidated Damages and Penalty?
Ans. Distinction between liquidated damages and penalty
Penaltyandliquidateddamageshaveonethingincommonthatbotharepayableontheoccurrenceof
abreachofcontract.Itisverydifficulttodrawaclearlineofdistinctionbetweenthetwobutcertain
principles as laid down below may behelpful.
1. If the sum payable is so large as to be far in excess of the probable damage on breach, it is
certainly a penalty.
2. Whereasumisexpressedtobepayableonacertaindateandafurthersumintheeventofdefault
being made, the latter sum is a penalty because mere delay in payment is unlikely to cause
damage.
3. Theexpressionusedbythepartiesisnotfinal.Thecourtmustfindoutwhetherthesumfixedin
the contract is in truth a penalty or liquidated damages. If the sum fixed is extravagant or
exhorbitant,the courtwill regard itisasa penalty evenif,itistermed asliquidated damages in
thecontract.
4. Theessence of a penalty is payment ofmoney stipulated asa terrorem of the off ending party.
Theessence of liquidated damagesisa genuinepreestimate of the damage.
5. Englishlawmakesadistinctionbetweenliquidateddamagesandpenalty,butnosuchdistinction
isfollowedinIndia.ThecourtsinIndiamustascertaintheactuallossandawardthesamewhich
amountmustnot,howeverexceedthesumsofixedinthecontract.Thecourtshavenottobother
about thedistinctionbuttoawardreasonablecompensationnot exceedingthe sumso fixed.

CLASS WORK

THEORETICAL QUESTIONS

Q1 “Ananticipatorybreachofcontractisabreachofcontractoccurringbeforethetimexedforperformance
hasarrived”.Discussstatingalsotheeffectofanticipatorybreachoncontracts.
Q2 “When a contract has been broken, the party who suers by such a breach is entitled to receive
compensationforanylossordamagecausedtohim”.Discuss.
Q3  “Liquidated damage is a genuine preestimate of compensation of damages for certain anticipated
breach of contract whereas Penalty on the other hand is an extravagant amount stipulated and is
clearlyunconscionableandhasnocomparisontothelosssufferedbytheparties”.Explain.

Chapter-1 : The Indian Contract Act, 1872 - 35 -

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UNIT 6: CONTINGENT AND QUASI CONTRACTS

Q30 What is a Contingent Contract? State the Essentials And Rules of enforcement relating to Contingent
Contract?
Ans. Contingent Contract (Section 31)
“Acontracttodoornottodosomething,ifsomeevent,collateraltosuchcontract,doesordoesnot
happen”.
Contracts of Insurance, indemnity and guarantee fall under this category.
Essentials of a contingent contract
(a) Theperformanceofacontingentcontractwoulddependuponthehappeningornonhappening
ofsomeeventor condition.Theconditionmay beprecedentorsubsequent.
(b) Theeventreferredtoiscollateraltothecontract.Theeventisnotpartofthecontract.Theevent
shouldbeneitherperformancepromisednoraconsiderationforapromise.
(c) Thecontingenteventshouldnotbeamere‘will’ofthepromisor.Theeventshouldbecontingent
inadditiontobeingthe willofthepromisor.
(d) Theeventmustbeuncertain. Wheretheeventiscertainorboundtohappen,thecontractisdue
to beperformed,thenitisanotcontingentcontract.
Rules relating to Enforcement
Therulesrelatingtoenforcementofacontingentcontractareasfollows:
(a) Enforcement of contracts contingent on an event happening: Whereacontractidentifieshappening
ofafuturecontingentevent,thecontractcannotbeenforceduntilandunlesstheevent‘happens’.
Ifthe happeningof the eventbecomesimpossible,then thecontingent contract isvoid.
(b) Enforcement of contracts contingent on an event not happening: Whereacontingentcontractis
made contingent on a nonhappening of an event, it can be enforced only when its happening
becomes impossible.
(c) A contract would cease to be enforceable if it is contingent upon the conduct of a living person
when that living person does some thing to make the ‘event’ or ‘conduct’ as impossible of
happening.
Section34saysthat“ifacontractiscontingentuponastohowapersonwillactatanunspecified
time,theeventshallbeconsideredtohavebecomeimpossiblewhensuchpersondoesanything
which renders it impossible that he should so act within any definite time or otherwise than
under further contingencies”.
(d) Contingent on happening of specified event within the fixed time: Section35saysthatContingent
contractstodoornottodoanything,ifaspecifieduncertaineventhappenswithinafixedtime,
becomes void if, at the expiration of time fixed, such event has not happened, or if, before the
time fixed, such event becomes impossible.
(e) Contingent on specified event not happening within fixed time: Section 35 also says that 
“Contingentcontractstodoornottodoanything,ifaspecifieduncertaineventdoesnothappen
withinafixedtime,maybeenforcedbylawwhenthetimefixedhasexpired,andsucheventhas
nothappenedorbeforethetimefixedhasexpired,ifitbecomescertainthatsucheventwillnot
happen”.

Chapter-1 : The Indian Contract Act, 1872 - 39 -

 (f) Contingent on an impossible event: Contingent agreements to do or not to do anything, if an
impossibleeventhappensarevoid,whethertheimpossibilityoftheeventisknownornottothe
partiestotheagreementatthetimewhenitismade.
Q31 State the difference between Contingent Contract and Wagering Agreement?
Ans. Difference between a contingent contract and a wagering agreement
Sr. Basis of difference Contingent contract Wagering agreement
No.
1. Meaning Acontingentcontractisa Awageringagreementisa
contracttodoornottodo promisetogivemoneyor
somethingwithreferencetoa money’sworthwithreferenceto
collateraleventhappening oranuncertaineventhappening
nothappening. ornothappening.
2. Reciprocalpromises Contingentcontractmaynot Awageringagreementconsists
containreciprocalpromises. ofreciprocalpromises.
3. Uncertainevent Inacontingentcontract,the Inawageringcontract,the
eventiscollateral. uncertaineventisthecorefactor.
4. Natureofcontract Contingentcontractmaynotbe Awageringagreementis
wageringinnature. essentiallycontingentinnature.
5. Interestofcontractingparties Contractingpartieshave Thecontractingpartieshaveno
interestinthesubjectmatterin interestinthesubjectmatter.
contingentcontract.
6. Doctrineofmutualityoflose Contingentcontractisnotbased Awageringcontractisagame,
andgain ondoctrineofmutualityoflose losingandgainingalone
andgain. matters.
7. Effectofcontract Contingentcontractisvalid. Awageringagreementisvoid.

Q32 What is Quasi Contract? State the kinds of Quasi Contract?

Ans. Quasi Contract
™ Avalidcontractmustcontaincertainessentialelements,suchasofferandacceptance,capacityto
contract, consideration and free consent.
™ Butsometimesthelawimpliesapromiseimposingobligationsononepartyandconferringright
in favour of the other even when there is no offer, no acceptance, no genuine consent, lawful
consideration,etc.and infact neitheragreementnor promise.
™ Such cases are not contracts in the strict sense, but the Court recognises them as relations
resembling those of contractsandenforcesthemasiftheywerecontracts.
™ HencethetermQuasi –contracts (i.e. resembling a contract).
™ Quasi contractsare based onprinciples ofequity, justice and good conscience.

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 Types of Quasi Contract
(a) Claim for necessaries supplied to persons incapable of contracting: If a person, incapable of
enteringintoacontract,oranyonewhomheislegallyboundtosupport,issuppliedbyanother
personwithnecessariessuitedtohisconditioninlife,thepersonwhohasfurnishedsuchsupplies
isentitledtobereimbursedfromthepropertyofsuchincapableperson.
(b) Payment by an interested person: A person who is interested in the payment of money which
another is bound by law to pay, and who therefore pays it, is entitled to be reimbursed by the
other.
(c) Obligation of person enjoying benefits of nongratuitous act: As per the Act “where a person
lawfully does anything for another person, or delivers anything to him not intending to do so
gratuitously and such other person enjoys the benefit thereof, the latter is bound to pay
compensation to the former in respect of, or to restore, the thing so done or delivered”.
It thus follows that for a suit to succeed, the plaintiff must prove:
(i) thathehaddonetheactorhaddeliveredthethinglawfully;
(ii) thathedidnotdosogratuitously;and
(iii) thattheotherpersonenjoyedthebenefit
(d) Responsibility of finder of goods : ‘Apersonwhofindsgoodsbelongingtoanotherand takesthem
intohiscustodyissubjecttosameresponsibilityasifhewere abailee’.
Thusafinderoflostgoodshas:
(i) totakepropercareofthepropertyasmanofordinaryprudencewouldtake
(ii) norighttoappropriatethegoodsand
(iii) torestorethegoodsiftheownerisfound.
(e) Money paid by mistake or under coercion: “Apersontowhommoneyhasbeenpaidor anything
deliveredby mistakeor undercoercion,must repayor returnit”.
Everykindofpaymentofmoneyordeliveryofgoodsforeverytypeof‘mistake’isrecoverable.

CLASS WORK

THEORETICAL QUESTIONS

Q1 Explainthemeaningof‘ContingentContracts’andstatetherulesrelatingtosuchcontracts.
Q2 Explaintheterm‘QuasiContracts’andstatetheircharacteristics.

Chapter-1 : The Indian Contract Act, 1872 - 41 -

 HOME WORK1
PRACTICAL PROBLEMS
1. A woman fraudulently represented to a firm of jewellersthat she was the wife of a certain minister
andthusobtainedtwopearlnecklacesoncreditonthepretextofbuyingthem.Shesubsequentlysold
thosenecklacestoathirdparty.Canthejewellerrecoverthenecklacesfromthethirdparty?
Ans. Hint : Third party has acquired right in good faith, so contract remains valid.

2. PeterFeraroofferedtopay`10,000toanyperson,whowouldswimahundredyardsonBombay’ssea
coastontheNewYear’sDayof1983.Afisherman,withoutanyinformationabouttheoffer,claimed`
10,000 on swimming the distance to save his life after he was accidently thrown overboard by the
roughseawaves.Canthefishermanclaimthemoney?
Or
A lost his dog. He sent his servant to search the dog. When he did not hear about the lost dog, he
advertisedarewardof`100toanypersonwhofoundthelostdogandreturnedittoA.Theservant
foundthelostdogandreturnedthedogtoA.Whentheservantcametoknowabouttherewardof `
100,heclaimedtherewardfromA.Canheclaimthereward?Givereasons.
Ans. Hint : Acceptance in ignorance of offer is invalid.

3. Atookabetof`500withBthatacertainhorsewouldwinarace.UnderthisagreementAhadtodeposit
`100withB.SinceAhadnomoney,heapproachedhisfriendC,whoadvancedthesumtohimonthe
conditionthatAwastoreturn`200,ifAshouldwinbetagainstB,buttoreturnnothing,ifAlost,Awon
hisbetagainstB.CanCrecover`200fromA?
Ans. Hint : Wagering Agreements are void.

4. AinvitesBtoseeapicturewithhim.Bacceptstheoffer.ApurchasesaticketforBandwaitsforhimat
thecinemahall.Bdoesnotturnup.HasAanycauseofactionagainstB?
Ans. Hint : Social Agreement.

5. AnilWasduetoperformacontracton20thFeb.1989,buton16thFeb.,repudiatedhisobligation.On
23rdFeb.,thecontractbecameillegalthroughachangeinlaw.Varun,theotherpartytothecontract,
filedasuitforbreachofcontracton20thFeb.Decidethecasewithreasons.
Ans. Hint : Anticipatory breach gives party a right to cancel the contract & claim damages.

6. Anemployeeagreesnottoinstituteanylegalproceedingsagainsthisemployer.Cantheagreementbe
enforced by the employer?
Ans. Hint : Agreement in Restraint of legal proceedings is void.

7. Aborrowergrantsapowerofattorneytobankauthorisingthebanktosellacertainpropertybelonging
tohimandappropriatethesaleproceedstowardshisindebtedness.Healsoagreesnottoinstituteany
legal proceedings against the bank challenging eitherthe bank’s actionsoritsstatementsof account.
Thepropertyissoldforalowpriceandthebankcallsupontheborrowertopaythebalance.Canthe
borrower institute legal proceedings against the bank questioning the sale?
Ans. Hint : Agreement in Restraint of legal proceedings is void.
8. Abanksanctionstoanoilmerchantaloanagainstthesecurityofgroundnutoilandanagreementis
entered into between the bank and the borrower. Before the loan is disbursed, the Reserve Bank

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 issuesastatutorydirectivetoallbanksprohibitinggrantofadvancesagainstthesecurityofgroundnut
oiland,therefore,thebankcancelstheloan.Canthecustomersuethebankfordamagesforbreachof
contract?
Ans. Hint : Contract discharged by impossibility does not give party a right to claim damages.

9. Astationeragreedtosupplywhitepaperonratecontractforoneyear.Later,duetosteepincreasein
marketprices,thecontractorstatedthathewouldsufferveryheavylossbysupplyingatthecontracted
rates.Underthe contract,therateswere tobefirmexceptforstatutorylevies.Thestationerclaimed
that the contract had become commercially impossible of performance and that he was discharged.
Commentonthelegalityof hisplea.
Ans. Hint : In commercial impossibility contract remains valid.

10. A letter of allotment of shares was claimed to have been posted by a company, but the applicant
deniedtohavereceivedit.Stateifthecontractisvalidlyconcludedinthiscase.Givereasons.
Ans. Hint : Contract is valid.

11. A Hindu husband executed and registered a document in favour of his wife whereby, referring to
quarrels and disagreement between the parties, he agreed to transfer one of his properties to her.
Later, he refused to effect the transfer. Can the wife file a suit against the husband for enforcing the
contract?
Ans. Hint : Natural love and affection was missing.

12. A,atradesman,leaveshisgoodsatB’shousebymistake.Btreatsthegoodsashisownandappropriates
them.CanAfileasuitagainstBforthepriceofsuchgoods?
Ans. Hint : Quasi Contract

13. AMohammedanladyasksforyouradvicewhethershecansueherownfatherinlawtorecoverarrears
ofallowancepayabletoherbythefatherinlawunderanagreementbetweenherownfatherandher
fatherinlaw in consideration of her marriage. Give reasons for your answer.
Ans. Hints : Beneficiary can file a valid suit.
14. MissKokilaagreedtosingattheStarTheatreforaperiodofthreemonthsbeginning1stJanuary1996.
She further agreed not to sing at any other theatre during this period. Is this contract enforceable
against her?
Ans. Hint : Suit for injunction.

15. A,aminor,borrowed`5,000onloanfromB,statingthathewasamajorandexecutedareceiptinhis
favour.Discussthe remediesavailabletoBtorecoverthemoneylentbyhim.
Ans. Hint : Contract with a minor is VoidAbInitio.

16. S,asinger,contractswithM,themanagerofatheatre,tosingatthelatter’stheatrefortwoevenings
ineveryweekduringthenexttwomonths.Mengagestopayher`300foreachevening’sperformance.
On the seventh evening, S wilfully absents herself from the theatre. M, in consequence, wants to
rescindthecontractandclaimcompensationforthelosssufferedbyhimthroughthenonfulfillment
ofthecontractbyS.Advise.
Ans. Hint : Party can cancel the contract & claim damages for breach of contract.
17. AentersintoacontractwithBforsupplying800tonnesofironorewithin4months.Afailstomake
delivery in time owing to difficulty in transport. But he admitted the availability of iron ore in the
marketatahigherprice.CanAtakethepleaofimpossibilityofperformance?Givereasons.
Chapter-1 : The Indian Contract Act, 1872 - 43 -
Ans. Hint : No. Contract remains valid.

18. X, an old lady, by a deed of gift made over certain property to her daughter D, with the specific
directionsthatsheshouldpayP,whoisthesisteroftheoldlady,asumof`100permonth.Thesame
dayDenteredintoanagreementwithPtopayhertheagreedamount.Dnowrefusestopayheraunt
P,theaboveamountonthepleathatnoconsiderationhadmovedfromPtoD.P,therefore,suesD.Is
thesuitmaintainableandcanDbeheldliabletopaytheamount?Decide.
Ans. Hints : Consideration may move from promisee or any other person.

19. AowesBrupeestenthousand.C,whoisafriendofA,paystoBrupeesfivethousandinfullsatisfaction
ofB’sclaimonAwhichBaccepts.CanBnowrecoverthebalancefromA?Givereasons.
Ans. Hint : In case of remission, contract is discharged.

20. Aisaminoragedseventeenyears,whobrokehisrightleginafootballmatch.HeengagedB,adoctor,
tosetit.Doesthedoctorhaveavalidclaimforhisservices?Givereasons.
Ans. Hint : Minor’s property is liable for necessaries.

21. Aissixteenyearsofage.HelendsrupeesonelakhtoBonthestrengthofamortgageexecutedinhis
favour.Istheborrowerliabletorepaythe money?Givereasons.
Ans. Hint : Contract for benefit of minor is valid.

22. Explaintheconceptof‘misrepresentation’in mattersofcontract.

SohaninducedSurajtobuyhismotorcyclesayingthatitwasinaverygoodcondition.Aftertakingthe
motorcycle,Surajcomplainedthatthereweremanydefectsinthemotorcycle.Sohanproposedtoget
itrepairedandpromisedtopay40%costofrepairs.Afterafewdays,themotorcycledidnotworkatall.
NowSurajwantstorescindthecontract.Decidegivingreasons.
Ans. Hint : One to ratification the contract is valid.

23. Shambhu Dayalstarted “selfservice” system inhisshop.Smt. Prakash enteredtheshop, tooka basket
and after taking articles of her choice into the basket reached the cashier for payments. The cashier
refusesto accept the price. Can Shambhu Dayalbe compelled tosellthesaid articles to Smt.Prakash?
Decide.
Ans. Hint : Invitation to an offer.

24. AkhileshenteredintoanagreementwithShekhartodeliverhim(Shekhar)5,000bagstobemanufactured
inhisfactory.ThebagscouldnotbemanufacturedbecauseofstrikebytheworkersandAkhileshfailedto
supply the said bags to Shekhar. Decide whether Akhilesh can be exempted from liability under the
provisionsoftheIndianContractAct,1872.
Ans. Hint : Strike is not a genuine Imp.

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 HOME WORK2

1. (i) RamaswamiproposedtosellhishousetoRamanathan.Ramanathansenthisacceptancebypost.Next
day,Ramanathansendsatelegramwithdrawinghisacceptance.Examinethevalidityoftheacceptance
accordingtotheIndianContractAct,1872inthelightofthefollowing:
(a) The telegram of revocation of acceptance was received by Ramaswami before the letter of
acceptance.
(Hint: Revocation is valid . Topic : Communication of offer acceptance and revocation)
(b) Thetelegramofrevocationandletterofacceptancebothreachedtogether.
(ii) “An anticipatory breach of contract is a breach of contract occurring before the time fixed for
performancehasarrived”. Discussstatingalsothe effect ofanticipatorybreach on contracts.
(Hint : Breach of Contract) [RTPNov18]
2. (i) Mr.Balwant,anoldman,byaregistereddeedofgift,grantedcertainlandedpropertytoMs.Reema,his
daughter.Bythetermsofthedeed,itwasstipulatedthatanannuityof`20,000shouldbepaidevery
yeartoMr.Sawant,whowasthebrotherofMr.Balwant.OnthesamedayMs.Reemamadeapromise
to Mr. Sawant and executed in his favouran agreementto give effect to the stipulation. Ms. Reema
failedtopaythestipulatedsum.InanactionagainstherbyMr.Sawant,shecontendedthatsinceMr.
Sawanthadnotfurnishedanyconsideration,hehasnorightofaction.
Examining the provisions of the Indian Contract Act, 1872, decide, whether the contention of Ms.
Reema is valid?
(Hint: Mr.Sawant has a right of action and annuity amount. Topic: Consideration may move from
promisee or any other person.)
(ii) A coolie in uniform picks up the luggage of R to be carried out of the railway station without being
askedbyRandRallowshimtodoso.ExaminewhetherthecoolieisentitledtoreceivemoneyfromR
undertheIndianContactAct,1872.
(Hint :Coolieisentitledtoremuneration ImpliedContract) [RTPNov18]
3. (i) Pointout withreasonwhetherthefollowingagreementsarevalidorvoid:
(a) Kamala promises Ramesh to lend ` 500,000 in lieu of consideration that Ramesh gets Kamala’s
marriage dissolved and he himself marries her. (Void)
(b) SohanagreeswithMohantosellhisblackhorse.Unknowntoboththeparties,thehorsewasdead
atthetimeofagreement.(Void)
(c) Ram sells the goodwill of his shop to Shyam for ` 4,00,000 and promises not to carry on such
business forever and anywhere in India. (Void)
(d) InanagreementbetweenPrakashandGirish,thereisaconditionthattheywillnotinstitutelegal
proceedings against each other without consent. (Void)
(e) Ramamurthy,whoisacitizenofIndia,entersintoanagreementwithanalienfriend. (Valid)
(Topic: Essential Elements of a valid contract.)
(ii) Ajay,VijayandSanjayarepartnersofsoftwarebusinessandjointlypromisestopay`6,00,000to
Kartik. Over a period of time Vijay became insolvent, but his assets are sufficient to pay one
fourthof hisdebts.Sanjay iscompelledtopay thewhole.DecidewhetherSanjay isrequired to
pay whole amount himself toKartik in discharging joint promise under the Indian Contract Act,
1872.
Chapter-1 : The Indian Contract Act, 1872 - 45 -
 (Hint:YesSanjayisliabletoKartikbutcanrecoverfromotherjointpromisors.Topic:Rightsandliabilities
of Joint Promisors)
4. (i) Define consideration. State the characteristics of avalid consideration. .(Topic : Consideration)
(ii) “Meresilencedoesnotamounttofraud”.Discuss(Topic: Fraud) [RTPNov18]

5. (i) ‘X’agreedtobecomeanassistantfor2yearsto‘Y’whowaspracticingCharteredAccountantatJodhpur.
Itwasalsoagreedthatduringthetermofagreement‘X’willnotpracticeasaCharteredAccountanton
his own account within 20 kms of the office of ‘Y’ at Jodhpur. At the end of one year, ‘X’ left the
assistantshipof‘Y’andstartedpracticeonhisownaccountwithinthesaidareaof20kms.
Referring to the provisions of the Indian Contract Act, 1872, decide whether ‘X’ could be restrained
fromdoingso?(Hint: No X cannot be restrained. Topic: Restrain on Trade)
(ii) Astrangertoacontractcannotsue,howeverinsomecasesevenastrangertocontractmayenforcea
claim.Explain.(Topic: Stranger to Consideration) [RTPMay18]
6. (i) PMLtd.,contractswithGuptaTraderstomakeanddelivercertainmachinerytothemby30thJune2017
for`21.50Lakhs.Due tolabourstrike,PMLtd. couldnotmanufacture and deliverthemachinery to
Gupta Traders. Later Gupta Traders procured the machinery from another manufacturer for ` 22.75
lakhs. Gupta Traders was also prevented from performing a contract which it had made with Zenith
TradersatthetimeoftheircontractwithPMLtd.andwerecompelledtopaycompensationforbreach
ofcontract.CalculatetheamountofcompensationwhichGuptaTraderscanclaimfromPMLtd.,referring
tothelegalprovisionsoftheIndianContractAct,1872.
(Hint: Amount Of Compensation : 1.25 lacs. Topic: Damages on breach of contract)
(ii) Astudentwasinducedbyhisteachertosellhisbrandnewcartothelatteratlessthanthepurchase
price tosecure moremarksin the examination.Accordingly thecar wassold.However, the father of
thestudentpersuadedhimtosuehisteacher.Stateonwhatgroundthestudentcansuetheteacher?
(Hint: Contract will be voidable. Topic: Undue Influence) [RTPMay18]
7. (i) Explaintheterm“coercion”anddescribeitseffectonthevalidityofacontract?
(ii) “Thoughaminorisnotcompetenttocontract,nothingintheContractActpreventshimfrommaking
theotherpartyboundtotheminor”.Discuss..(Topic: Effect of an agreement with Minor)
(iii) AreceivedcertaingoodsfromBpromisingtopay`1,00,000.Lateron,Aexpressedhisinabilitytomake
payment.C,whoisknownto A,pays `60,000toBonbehalfofA.However,A wasnotawareofthe
payment.NowBisintendingtosueAfortheamountof`1,00,000.Discusswhetherthecontentionof
Bisright??(Hint : No contention of B is not correct. Topic: Consideration may move from promisee or
any other person) [RTPMay18]
8. Decide with reasons whetherthe followingagreements arevalid orvoid underthe provisions of the
IndianContractAct,1872:
(i) Vijay agrees with Saini to sell his black horse for ` 3,00,000. Unknown to both the Parties, the
horsewasdeadatthetimeoftheagreement.(Void)
(ii) SarveshsellsthegoodwillofhisshoptoVikasfor`10,00,000andpromisesnottocarryonsuch
business forever and anywhere in India. (Void)
(iii) Mr.Xagreestowriteabookwithapublisher.Afterfewdays,Xdiesinanaccident.(Void)
[RTPMay18]
9. FatherpromisedtopayhissonasumofrupeeonelakhifthesonpassedC.A.examinationinthefirst
attempt.Thesonpassedtheexaminationinthefirstattempt,butfatherfailedtopaytheamountas

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 promised.Sonfilesasuitforrecoveryoftheamount.Statealongwithreasonswhethersoncanrecover
theamountundertheIndianContractAct,1872.
(Hint: Son cannot recover any amount. Topic: Essential elements of a valid contract)
10.(a) Enumerate the persons by whom a contract may be performed under the provisions of the Indian
ContractAct,1872.
.(Topic: Rules related with performance)
(b) ‘X’enteredintoacontractwith‘Y’tosupplyhim1,000waterbottles@`5.00perwaterbottle,tobe
deliveredataspecifiedtime.Thereafter,‘X’contractswith‘Z’forthepurchaseof1,000waterbottles
@`4.50perwaterbottle,andatthesametimetold‘Z’thathedidsoforthepurposeofperforminghis
contractenteredintowith‘Y’.‘Z’failedtoperformhiscontractinduecourseandmarketpriceofeach
water bottle on that daywas ` 5.25 per water bottle.Consequently,‘X’ could not procure anywater
bottleand‘Y’rescindedthecontract.Calculatetheamountofdamageswhich‘X’couldclaimfrom‘Z’in
thecircumstances?Whatwouldbeyouranswerif‘Z’hadnotinformedaboutthe‘Y’scontract?Explain
withreferencetotheprovisionsoftheIndianContractAct,1872.
(Hint: 0.75 per bottle in first case and in second case the liability will be 0.50 per bottle. Topic: Damages
for breach of contract.)
11. (i) Mr. JHUTH entered into an agreement with Mr. SUCH topurchase his (Mr. SUCH’s)motor car for Rs.
5,00,000/withinaperiodofthreemonths.AsecurityamountofRs.20,000/wasalsopaidbyMr.JHUTH
toMr.SUCHintermsoftheagreement.Aftercompletionofthreemonthsofenteringintotheagreement,
Mr.SUCHtriedtocontractMr.JHUTHtopurchasethecarintermsoftheagreement.Evenafterlapseof
anotherthreemonthperiod,Mr.JHUTHneitherrespondedtoMr.SUCH,nortohisphonecalls.After
lapse of another period of six months. Mr. JHUTH contracted Mr. SUCH and denied to purchase the
motorcar.HealsodemandedbackthesecurityamountofRs.20,000/fromMr.SUCH.Referringtothe
provisionsoftheIndianContractAct,1872,statewhetherMr.SUCHisrequiredtorefundthesecurity
amounttoMr.JHUTH.
AlsoexaminethevalidityoftheclaimmadebyMr.JHUTH,ifthemotorcarwouldhavedestroyedbyan
accident within the three month’s agreement period.
(Hint : Mr.Juth will not be entitled for any refund but if laptop was destroyed within this time then
he will be entitled for refund Topic: Discharge of Contract)
(ii) StatethevariousmodesofrevocationofofferundertheIndianContractAct,1872
( Topic : Communication and Revocation of offer)
(iii) Mr.SAMANTownedamotorcar.HeapproachedMr.CHHOTUandofferedtosalehismotorcarforRs.
3,00,000.Mr.SAMANTtoldMr.CHHOTUthatthemotorcarisrunningattherateof30KMsperlitreof
petrol.Boththefuelmeterandthespeedmeterofthecarwereworkingperfectly.Mr.CHHOTUagreed
withtheproposalofMr.SAMANTandtookdeliveryofthecarbypayingRs.3,00,000/toMr.SAMANT.
After 10 days, Mr. CHHOTU came back with the car and stated that the claim made by Mr. SAMANT
regardingfuelefficiencywasnotcorrectandthereforetherewasacaseofmisrepresentation.Referring
totheprovisionsoftheIndianContractAct,1872,decideandwritewhetherMr.CHHOTUcanrescind
thecontractintheaboveground..
(Hint : Mr.Chhotu cannot rescind contract Topic : Misrepresentation)
12. (i) “Toformavalidcontract,considerationmust beadequate”.Comment. .(Topic: Consideration)
Or
When a contract has been broken, the party who suffers by such a breach is entitled to receive
compensationforanylossordamagecausedtohim”.Discuss..(Topic : Breach of Contract)

Chapter-1 : The Indian Contract Act, 1872 - 47 -

13. XofferedthroughanadvertisementintheStatesmantosellcertain“antique”onaparticulardayata
particularplaceinDelhi.InresponsetotheadvertisementapersontraveledallthewayfromBombay
toDelhiand foundtohisimmeasurable annoyancethattheplace waslocked and therewasnosuch
projectedsale.HewantedtosueXonthisaccount.Woulditbeadvisableforhimtotakethiscourseof
action?
Hint : Cannot sue
14. WisthewifeofH,whoislunatic,purchasesadiamondsetof?10lacsfromBeautyJewelleroncredit.
Referring to the provisions of the Indian Contract Act, 1872, decide whether the Beauty Jeweller is
entitledtoclaimtheaboveamountfromthepropertyofH.
Hint Jeweller is not entitled to recover the amount of diamond set from H Hisnotcompetent
tocontractandisnotliableu/s68,asthediamondsetoft10lacssoldtohiswifeisnot‘necessities’.
15. X,aminorwasstudyinginM.Cominacollege.On1stJuly,2005hetookaloanof`10,000fromBfor
paymentofhiscollegefeesandtopurchasebooksandagreedtorepayby31stDecember,2005,Xpos
sessesassetsworth`2lakhs.OnduedateXfailstopaybacktheloantoB.Bnowwantstorecoverthe
loanfromXoutofhis(X’s)assets.Referringtotheprovisionsofthe IndianContractAct,1872decide
whether B would succeed.
Hint: Loanof`10,000isonaccountofnecessities.X’spropertyisliabletoBfor`10,000becausethe
person who supplies necessities to the incompetent person is entitled to be reimbursed from the
propertyofsuchincompetentperson(Sec.68);ButXshallnotbepersonallyliable.
16. ‘A’appliestoabankerforaloanatatimewhenthereisstringencyinthemoneymarket.Thebanker
declines to make the loan except at an unusually high rate of interest. A accepts the loan on these
terms. Whether thecontract is induced byundueinfluence?Decide.
Hint: There is no undue influence. ReferChaptertextsince,asbetweenthepartiesonequalfooting,
the Court does not hold a transaction to be unconscionable merely on the ground of high rate of
interest.
17. A threatened his wife and son to commit suicide if they did not agree to transfer A’s house to his
brother.Thereuponhiswifeandsonagreedtotransferthehouse.Subsequently,hiswifeandsonfiled
asuittosetasidethetransfer.Willtheysucceed?
Hint: Yes,Threattocommitsuicideamountstocoercion.Refer
18. AagreedtosellricetoB.BothAandBbelievedthatthericeisoldbasmatiandaveryhighpriceis—J
settled.Subsequently,itisdiscoveredthatriceisnewone.CanBgetbackhisprice?Willyouranswer
bedifferentifBalonepurchasedthericethinkingittobeoldbasmati?
Hint: Yes,Mistakeastoqualityofthesubjectmatter.IfBalonepurchasedthericethinkingittobeold
Basmati, he cannot avoid the contract as it will be unilateral mistake of factwhich does not make it
voidable.
19. PandSbeingtradersenterintoacontract.Phasprivateinformationofachangeinpriceswhichwould
affectS’swillingnesstoproceedwiththecontract.IsPbound toinform?
Hint: No,Pisnotboundtoinform.
20. Pointout withreasonswhetherthefollowingagreementsarevalidorvoid:
(i) SohanagreeswithMohantosellhisblackhorse.Unknowntoboththeparties,thehorsewasdead
atthetimeofagreement.
(ii) RamsellsthegoodwillofhisshoptoShyamfor`4,00,000andpromisesnottocarryonsuchbusi
ness forever and anywherein India.

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 (iii) InanagreementbetweenPrakashandGirish,thereisaconditiontheywillnotinstitutelegalpro
ceedingagainst each other without consent.
(iv) Ramamurthy,whoisa citizenof India,enters intoanagreement withan alienfriend.
Ans:
(i) The agreement is voidThereisabilateralmistakeastothefact,viz.subjectmatterofthecontract
(Sec.20);
(ii) The agreement is void  It is in restraint of trade; the restrictions on Ram is for ‘forever’ and for
‘anywhere in India’, and so the restraint is not reasonable as to the ‘duration’and ‘place’of business
(Sec.27).
(iv) TheagreementisvoidSinceitisinrestraintoflegalproceedings(Sec.28).
(iv) TheagreementisvalidSineitisnotanagreementwithanalienenemy.
21. Mr.SethanindustrialisthasbeenfightingalongdrawnlitigationwithMr.Ramananotherindustrialist.
TosupporthislegalcampaignMr.SethenliststheservicesofMr.Xalegalexpertstatingthatanamount
of`5lakhswouldbepaid,ifMr.XdoesnottakeupthebriefofMr.Raman.Mr.Xagrees,butattheend
ofthelitigation,Mr.Sethrefusestopay.DecidewhetherMr.XcanrecovertheamountpromisedbyMr.
SethundertheprovisionsoftheIndianContractAct,1872.
Hint : Mr.Xcannotrecover`5lakhsfromMr.SethasthegivenagreementrestrainsMr.Xfromexercising
alawfulprofessionandsothisnorppmpntisinrpstrnintnitrade(Sen.27).
22. X, a physician practicing in New Delhi, took Y as his assistant for three years during which T
agreednottopracticeonhisowninNewDelhi.Attheendoftheyearfromthedateofagreement
withX,theassistant,Y,leftXandbeganhisownindependentpracticeinNewDelhi.HasXany
legalremedyagainstY?
Hint: Yes,XhasgotlegalremedyagainstY.Ycanberestraineduptothreeyearsasagreedbythe
parties.
23. ZrentouthishousesituatedatMumbaitoWforarentof`10,000permonth.Asumof`5lakh,the
housetaxpayablebyZtotheMunicipalCorporationbeinginarrears,hishouseisadvertisedforsaleby
thecorporation.Wpaysthecorporation,thesumduefromZtoavoidlegalconsequences.Referringto
theprovisionsoftheIndianContractAct,1872decidewhetherWisentitledtogetthereimbursement
ofthesaidamountfromZ.
Hint:WisentitledtoreimbursementfromZu/s69ofContractActsinceheisaninterestedparty.
24. X,YandZarepartnersofsoftwarebusinessjointlypromisetopay`30,000toA.Overaperiodoftime
Ybecameinsolvent,buthisassetsaresufficienttopayoneforthofhisdebts.Ziscompelledtopaythe
whole.DecidewhetherZ isrequiredtopaywholeamounthimselfto Aindischargingjointpromise?
Hint: AccordingSection43ofIndianContractAct,1872whentwoormorepersonsmakeajointpromise,
thepromiseemay,inabsenceofexpressagreementtothecontrary,compelanyoneormoreofsuch
jointpromisersorperformthewholeofthepromise.Further,ifanyoneoftwoormorejointpromisers
makesdefaultinsuchcontribution,theremainingjointpromisorsmustbearthelossarisingfromsuch
defaultinequalshares.Therefore,inthiscase,Zisentitledtoreceive2,500fromY’sassetsand13,750
fromX.
25. Mr.RamaswamyofChennaiplacedanorderwithMr.ShahofAhmedabadforsupplyofuriddaal on
10.11.2006atacontractedpriceof`40perkg.Theorderwasforthesupplyof10tonneswithin
amonths’timeviz,,before09.12.2006.On04.12.2006Mr.ShahwrotealettertoMr.Ramaswamy
statingthatthepriceofuriddaalwasskyrocketingto?50Per.Kg.andhewouldnotbeableto
supplyasperoriginalcontract.Thepriceofuriddaalroseto?53on09.12.06AdviseMr.Ramaswamy
citingthelegalposition.

Chapter-1 : The Indian Contract Act, 1872 - 49 -

 Hint: Increaseinpriceofuriddaaldoesnotamounttosuperveningimpossibility(Sec.56).Mr.Shah
committed breach of contract. If Ramaswamy waits till 09.12.2006  Mr. Shah shall be liable to pay
damagestoMr.Ramaswamy. The amount of damages shall be 10 tons @ `13perkg (i.e.,difference
betweenthecontractpriceandpriceason09.12.2006),ie.,`1,30,000.However,ifsomesupervening
impossibilityarisesbefore09.12.2006(e.g.,impositionofbanontradinginuriddaalbytheGovernment),
thecontractshallbecomevoid,andconsequently,Mr.Shahshallnotbeliabletopayanydamages.If
Ramaswamy repudiates the contract on 04.12.2006 Mr. Shah shall be liable to pay damages to Mr.
Ramaswamy. The amount of damages shall be 10 tons @ ` 10 per kg (ie., difference between the
contractpriceandpriceason04.12.2006),i.e.,`1,00,000.
26. Afireworkmerchantbooked10packetsofsomespecialkindofcrackerswithatransportcompany,and
atthattimeheinformedthecompanythatthepacketswerebeingsentforDiwalifestivalandincase
they did not reach their destination in time, he will lose his profit of ` 2,000. However,the packets
reached the destination after Diwali festival was over. Can the merchant recover ` 2,000 from the
transport company.
Hint:Yes,knownspecialdamagescanberecovered.
27. Mr.XandMr.Yenteredintoacontracton1stAugust,2018,bywhich Mr.Xhadtosupply50tonsofsugar
toMr.Yatacertainpricestrictlywithinaperiodof10daysofthecontract.Mr.Yalsopaidanamountof
`50,000towardsadvanceasperthetermsoftheabovecontract.Themodeoftransportationavailable
betweentheirplacesisroadwayonly.Severefloodcameon2 ndAugust,2018andtheonlyroadconnecting
theirplaceswasdamagedandcouldnotberepairedwithinfifteendays.Mr.Xofferedtosupplysugar
on20thAugust,2018forwhichMr.Ydidnotagree.On1 stSeptember,2018,Mr.Xclaimedcompensation
of`10,000fromMr.Yforrefusingtoacceptthesupplyofsugar,whichwasnottherewithinthepurview
ofthecontract.Ontheotherhand,Mr.Yclaimedforrefundof`50,000,whichhehadpaidasadvancein
termsofthecontract.AnalysetheabovesituationintermsoftheprovisionsoftheIndianContractAct,
1872anddecideonY’scontention. [Sugg.Nov18, 4 Marks]
28. WhatisContingentContract?DiscusstheessentialsofContingentContractaspertheIndianContract
Act,1872. [Sugg.Nov18, 7 Marks]
29. Mr.Rameshpromisedtopay`50,000tohiswifeMrs.Lalisothatshecanspendthesumonher30 th
birthday.Mrs.Laliinsistedherhusbandtomakeawrittenagreementifhereallylovedher.Mr.Ramesh
madeawrittenagreementandtheagreementwasregisteredunderthelaw.Mr.Rameshfailedtopay
thespecifiedamounttohiswifeMrs.Lali.Mrs.LaliwantstofileasuitagainstMr.Rameshandrecover
thepromisedamount.ReferringtotheapplicableprovisionsoftheContractAct,1872,advisewhether
Mrs.Lali willsucceed. [Sugg.Nov18, 3 Marks]
30. Ashopkeeperdisplayedapairofdressintheshowroomandapricetagof`2,000wasattachedtothe
dress.Ms.Lovely,lookedatthetagandrushedtothecashcounter.Thensheaskedtheshopkeeperto
receive the payment and pack up the dress. The shopkeeper refused to handover thedress to Ms.
Lovelyinconsiderationofthepricestatedinthepricetagattachedtothedress.Ms.Lovelyseeksyour
advicewhethershecansuetheshopkeeperfortheabovecauseundertheIndianContractAct,1872.
[Sugg.Nov18, 3 Marks]
31. ExplainthemodesofrevocationofanofferaspertheIndianContract5Act,1872.
[Sugg.Nov18, 5 Marks]
32. X,YandZarepartnersinafirm.TheyjointlypromisedtopayRs.3,00,000toD.Ybecomeinsolventand
hisprivateassetsaresufficienttopay1/5ofhisshareofdebts.Xiscompelledtopaythewholeamount
to D. Examining the provisions of the Indian Contract Act, 1872, decide the extent to which X can
recovertheamountfromZ. [Sugg.May18, 4 Marks]

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33. Statetheexceptionstotherule“Anagreementwithoutconsiderationisvoid”.[Sugg.May18, 5 Marks]
34. Distinguish between wagering agreement and contract of insurance. [Sugg.May18, 2 Marks]
35. Examine with reason that the given statement is correct or incorrect “Minor is liable to pay for the
necessaries supplied to him”. [Sugg.May18, 2 Marks]
36. MLtd.,contractwithShantiTraderstomakeanddelivercertainmachinerytothemby30.6.2017forRs.
11.50 lakhs.Due to labour strike,M Ltd. could not manufacture and deliver themachinery toShanti
Traders.Later, Shanti Traders procured the machinery from another manufacturer for Rs.12.75 lakhs.
Due to this Shanti Traders was also prevented from performing a contract which it had made with
ZenithTradersatthetimeoftheircontractwith MLtd.andwerecompelledtopaycompensationfor
breachofcontract.AdviseShantiTraderstheamountofcompensationwhichitcanclaimfromMLtd.,
referringtothelegalprovisionsoftheIndianContractAct,1872. [Sugg.May18, 6 Marks]
37. DefineFraud.Whether“meresilencewillamounttofraud”aspertheIndianContractAct,1872?
[Sugg.May18, 6 Marks]
38. Mr.Sohanlalsold10acresofhisagriculturallandtoMr.Mohanlalon25thSeptember2018for‘25Lakhs.
The Property papers mentioned a condition, amongst other details, that whosoever purchases the
landisfreetouse9acresasperhischoicebuttheremaining1acrehastobeallowedtobeusedbyMr.
Chotelal,sonofthesellerforcarryingoutfarmingorotheractivityofhischoice.On12thOctober,2018,
Mr.Sohanlaldiedleavingbehindhissonandlife.On15thOctober,2018purchaserstartedconstruction
ofanauditoriumonthewhole10acresoflandanddeniedanylandtotheson.
NowMr.Chotelal wantstofileacaseagainstthepurchaserandgeta suitable redressed.Discussthe
aboveinlightofprovisionsofIndianContractAct,1872anddecideuponMr.Chotelal‘splanofaction?
[Sugg.May19, 4 Marks]
39. “Meresilenceisnotfraud”buttherearesomecircumstanceswherethe“silenceisfraud”.Explainthe
circumstancesaspertheprovisionofIndianContractAct,1872? [Sugg.May19, 7 Marks]
40. Mr.Richaspiredtogetaselfportraitmadebyanartist.HewenttotheworkshopofMr.Canartistand
askedwhether hecouldsketch the former’sportrait onoilpaintingcanvass.Mr. Cagreedto theoffer
and asked for ` 50,000 as full advance payment for the above creative work. Mr. C clarified that the
paintingshallbecompletedin10sittingsandshalltake3months.
Onreachingtotheworkshopforthe6thsitting,Mr.RichwasinformedthatMr.Cbecameparalyzedand
wouldnotbeabletopaintfornearfuture.Mr.ChadasonMr.Kwhowasstillpursuinghisstudiesand
had not taken up his father’s profession yet?
DiscussinlightoftheIndianContractAct,1872?
(i) CanMr.RichaskMr.Ktocompletetheartisticworkinlieuofhisfather?
(ii) CouldMr.RichaskMr.Kforrefundofmoneypaidinadvancetohisfather?
[Sugg.May19, 6 Marks]
41. DiscusstheessentialsofUndueInfluenceaspertheIndianContractAct,1872.[Sugg.May19, 5 Marks]
42. X founda wallet in a restaurant. Heenquired of all the customerspresent there but the trueowner
could notbe found.Hehandedoverthe sametothemanager oftherestauranttokeep tillthetrue
ownerisfound.Afteraweekhewentbacktotherestauranttoenquireaboutthewallet.Themanager
refusedtoreturnitbacktoX,sayingthatitdidnotbelongtohim.
InthelightoftheIndianContractAct,1872,canXrecoveritfromtheManager?
[Sugg.Nov19, 4 Marks]

Chapter-1 : The Indian Contract Act, 1872 - 51 -

43. Defineconsideration.WhatarethelegalrulesregardingconsiderationundertheIndianContractAct,
1872? [Sugg.Nov19, 7 Marks]
44. Mr. Sonumal a wealthy individual provided a loan of Rs. 80,000 to Mr. Datumal on 26.02.2019. The
borrowerMr.Datumalasked,forafurtherloanofRs.1,50,000.Mr.Sonumalagreedbutprovidedthe
loaninpartsatdifferentdates.HeprovidedRs.1,00,000on28.02.2019andremainingRs.50,000on
03.03.2019.
On 10.03.2019 Mr. Datumal while paying off part Rs. 75,000to Mr.Sonumal insisted that the lender
shouldadjustedRs.50,000towardstheloantakenon 03.03.2019andbalanceasagainsttheloanon
26.02.2019.
Mr. Sonumal objected to this arrangement and asked the borrower to adjust in the order of data of
borrowal df funds.
Now you decide:
(i) WhetherthecontentionofMr.Datumalcorrectorotherwiseaspertheprovisions oftheIndian
ContractAct1872?
(ii) Whatwouldbetheanswerincasetheborrowerdoesnotinsistonsuchorderofadjustmentof
repayment?
(iii) What would the mode of adjustment/appropriation of such part payment in case neither Mr.
SonumalnorMr.Datumalinsistanyorderofadjustmentontheirpart? [Sugg.Nov19, 6 Marks]
45. Explaintheterm‘Coercion’andwhataretheeffectsofcoercionunderIndianContractAct,1872.
[Sugg.Nov19, 5 Marks]
46. Krish,KamyaandKetanarepartnersinafirm.TheyjointlypromisedtopayRs.6,00,000toDia.Kamya
becomeinsolventandherprivateassetsaresufficienttopay1/5ofhershareofdebts.Krishiscompelled
topaythewholeamounttoDia.ExaminingtheprovisionsoftheIndianContractAct,1872,decidethe
extenttowhichKrishcanrecovertheamountfromKetan. [MTP APRIL19, 4 Marks]
47. StatethegroundsuponwhichacontractmaybedischargedundertheprovisionsoftheIndianContract
Act,1872. [MTP APRIL19, 7 Marks]
48. ‘X’enteredintoacontractwith‘Y’tosupplyhim1,000waterbottles@Rs.5.00perwaterbottle,tobe
deliveredataspecifiedtime.Thereafter,‘X’contractswith‘Z’forthepurchaseof1,000waterbottles@
Rs.4.50perwaterbottle,andatthesametimetold‘Z’thathedidsoforthepurposeofperforminghis
contractenteredintowith‘Y’.‘Z’failedtoperformhiscontractinduecourseandmarketpriceofeach
waterbottleonthatdaywasRs.5.25perwaterbottle.Consequently,‘X’couldnotprocureanywater
bottleand‘Y’rescindedthecontract.Calculatetheamountofdamageswhich‘X’couldclaimfrom‘Z’in
thecircumstances?Whatwouldbeyouranswerif‘Z’hadnotinformedaboutthe‘Y’scontract?Explain
withreferencetotheprovisionsoftheIndianContractAct,1872. [MTP APRIL19, 6 Marks]
49. “Noconsideration,nocontract”.Discuss.
Or
“Meresilencedoesnotamounttofraud”.Discuss. [MTP APRIL, March18, 5 Marks]
50. ShambhuDayalstarted“selfservice”systeminhisshop.Smt.Prakashenteredtheshop,tookabasket
andaftertakingarticlesofherchoiceintothebasketreachedthecashierforpayments.
The cashierrefusestoaccept the price.Can Shambhu Dayalbecompelled to sellthe said articles to
Smt.Prakash?DecideaspertheprovisionsoftheIndianContractAct,1872.
[MTP MARCH19, 4 Marks]
51. “Ananticipatorybreachofcontractisabreachofcontractoccurringbeforethetimefixedforperformance
hasarrived”. Discussstatingalso theeffect ofanticipatorybreachon contracts.
[MTP Oct, MARCH19, 7 Marks]

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52. Mr.XandMr.Yenteredintoacontracton1stAugust,2018,bywhichMr.Xhadtosupply50tonsofsugar
toMr.Yatacertainpricestrictlywithinaperiodof10daysofthecontract.Mr.Yalsopaidanamountof
Rs.50,000towardsadvanceasperthetermsoftheabovecontract.Themodeoftransportationavailable
between their places is roadway only. Severe flood came on 2nd August, 2018 and the only road
connectingtheir places was damagedand could not be repaired within fifteen days. Mr. X offered to
supplysugaron20thAugust,2018forwhichMr.Ydidnotagree.On1stSeptember,2018,Mr.Xclaimed
compensationofRs.10,000fromMr.Yforrefusingtoacceptthesupplyofsugar,whichwasnotthere
withinthepurviewofthecontract.Ontheotherhand,Mr.YclaimedforrefundofRs.50,000,whichhe
hadpaidasadvanceintermsofthecontract.Analysetheabovesituationintermsoftheprovisionsof
theIndianContractAct,1872anddecideonY’scontention. [MTP MARCH19, 6 Marks]
53. Define consideration. State the characteristics of a valid consideration. [MTP MARCH19, 5 Marks]
54. Pointout withreasonwhetherthefollowingagreementsarevalidorvoid:
(i) RiyapromisesSamarthtolendRs.500,000inlieuofconsiderationthatSamarthgetsRiya’smarriage
dissolved and he himself marries her.
(ii) Aryan agrees with Mathew to sell his black horse. Unknown to both the parties, the horse was
deadatthetimeofagreement.
(iii) Ravisellsthegoodwillofhisshopto Shyamfor Rs. 4,00,000andpromises nottocarryonsuch
business forever and anywhere in India.
(iv) InanagreementbetweenPrakashandGirish,thereisaconditionthattheywillnotinstitutelegal
proceedingsagainst each other without consent. [MTP OCT19, 4 Marks]
55. Evergreen Ltd., contractswith Shakti Traders to make and deliver certain machinery to themby30th
June,2004forRs.11.50lakhs.Duetolabourstrike,EvergreenLtd.couldnotmanufactureanddeliver
the machinery to Shakti Traders. Later, Shakti Traders procured the machinery from another
manufacturerforRs.12.75lakhs.ShaktiTraderswasalsopreventedfromperformingacontractwhichit
hadmadewithXyloTradersatthetimeoftheircontractwithEvergreenLtd.andwerecompelledtopay
compensationforbreachofcontract.AdviseShaktiTraderstheamountofcompensationwhichitcan
claimfromEvergreenLtd.,referringtothelegalprovisionsoftheIndianContractAct,1872.
[MTP OCT19, 6 Marks]
56. “Toformavalidcontract,considerationmust beadequate”.Comment. [MTP OCT19, 5 Marks]
57. Ishaan,aged16years,wasstudyinginanengineeringcollege.On1stMarch,2016hetookaloanof`2
lakhs from Vishal for the payment of his college fee and agreed to pay by 30th May, 2017.Ishaan
possessesassetsworth`15lakhs.OnduedateIshaanfailstopaybacktheloan toVishal.Vishalnow
wantstorecovertheloanfromIshaanoutofhisassets.DecidewhetherVishalwouldsucceedreferring
totheprovisionsoftheIndianContractAct,1872. [MTP MARCH18, 4 Marks)]
58. StatethegroundsuponwhichacontractmaybedischargedundertheprovisionsoftheIndianContract
Act,1872. [MTP MARCH18, 7 Marks]
59. ‘X’enteredintoacontractwith‘Y’tosupplyhim1,000waterbottles@`5.00perwaterbottle,tobe
deliveredataspecifiedtime.Thereafter,‘X’contractswith‘Z’forthepurchaseof1,000waterbottles@
`4.50perwaterbottle,andatthesametimetold‘Z’thathedidsoforthepurposeofperforminghis
contractenteredintowith‘Y’.‘Z’failedtoperformhiscontractinduecourseandmarketpriceofeach
water bottle on that daywas ` 5.25 per waterbottle.Consequently, ‘X’ could not procure anywater
bottleand‘Y’rescindedthecontract.Calculatetheamountofdamageswhich‘X’couldclaimfrom‘Z’in
thecircumstances?Whatwouldbeyouranswerif‘Z’hadnotinformedaboutthe‘Y’scontract?Explain
withreferencetotheprovisionsoftheIndianContractAct,1872. [MTP MARCH18, 6 Marks]

Chapter-1 : The Indian Contract Act, 1872 - 53 -

60. ExplainthetypeofcontractsinthefollowingagreementsundertheIndianContractAct,1872:
(i) AcoolieinuniformpicksuptheluggageofAtobecarriedoutoftherailwaystationwithoutbeing
asked by A and A allows him to do so.
(ii) Obligationoffinderoflostgoodstoreturnthemtothetrueowner
(iii) AcontractswithB(ownerofthefactory)forthesupplyof10tonsofsugar,butbeforethesupply
iseffected, thefirecaughtinthefactoryandeverythingwasdestroyed. [RTPMay20]
61. “Onlyapersonwhoispartytoacontractcansueonit”.Explainthisstatementanddescribeitsexceptions,
if any. [RTPMay20]
63. Explainthecircumstancesinwhichthepersonisdeemedtobeinapositiontodominatethewillofthe
otherpersonundertheIndianContractAct,1872. [RTPMay20]
64. Whatisawageringagreement?Describethetransactionswhichresembleswithwageringtransactions
butarenotvoid. [RTPMay20]
65. “Thebasicruleisthatthepromisormustperformexactlywhathehaspromisedtoperform.”Explain
statingtheobligationofpartiestocontracts. [RTPMay20]
66. WhatdoyoumeanbyQuantumMeruitandstatethecaseswheretheclaimforQuantumMeruitarises?
[RTPMay20]
67. Explainthemeaningof‘ContingentContracts’andstatetherulesrelatingtosuchcontracts.
[RTPMay20]
68. Explain the concept of ‘misrepresentation’ in matters of contract. Sohan induced Suraj to buy his
motorcyclesayingthatitwasinaverygoodcondition.Aftertakingthemotorcycle,Surajcomplained
that thereweremany defectsin the motorcycle. Sohan proposedtoget it repairedand promised to
pay40%costofrepairsAfterafewdays,themotorcycledidnotworkatall.NowSurajwantstorescind
thecontract.DecidegivingreasonswhetherSurajcanrescindthecontract? [RTPMay20]
69. X,aminorwasstudyinginM.Com.Inacollege.On1stJuly,2019hetookaloanof`1,00,000fromBfor
payment of his college fees and to purchase books and agreed to repay by 31st December, 2019. X
possessesassetsworth`9lakhs.Onduedate,XfailstopaybacktheloantoB.Bnowwantstorecover
theloanfromXoutofhis(X’s)assets.Referringtotheprovisionsof IndianContractAct,1872decide
whether B would succeed. [RTPMay20]

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 CHAPTER2
SALE OF GOODS ACT, 1930

INTRODUCTION
 Previously Indian Contract Act, 1872 was applicable for Sale of Goods
 TheSaleofGoodsActwasseparatedandcameintoforce on 1st July, 1930.
 TheActisApplicabletoWhole of India, Except State of Jammu and Kashmir.
 TheSaleofGoodsActisapplicableonlytoSaleofMovable Goods
 SaleofImmovable Goods, is covered under Transfer of Property Act 1882,
 TheActisOnly applicable for SALE OF GOODS
 The Act is NOT applicabletoanyothertransactions.E.g.Gift,Lease,Pledgeetc.

UNIT 1: FORMATION OF THE CONTRACT OF SALE

Q1 Define the word “Contract of Sale” [Sec 4(1)]

Ans.
According to section 4(1),“Acontractofsaleofgoodsisacontractwherebythesellertransfersoragrees
totransferthepropertyingoodstothebuyerforaprice”.Theremaybeacontractofsalebetweenonepart
owner andanother.
Acontractofsalemaybeabsoluteorconditional.[Section 4(2)]
Q2 Define the word “Sale” [Sec 4(3)]
Ans.
Sale:InSale,thepropertyingoodsistransferredfrom sellertothebuyerimmediately.Thetermsale is
definedintheSection4(3)oftheSaleofGoodsAct,1930as–“whereunderacontractofsaletheproperty
inthegoodsistransferredfromthesellertothebuyer,thecontractiscalledasale.”
Q3 Define the word “Agreement to Sell” [sec 4(3)]
Ans.
Agreement to Sell:Inanagreementto sell,theownershipofthegoodsisnot transferredimmediately.
Itisintendingtotransferatafuturedateuponthecompletionofcertainconditionsthereon.Thetermis
definedinSection4(3)oftheSaleofGoodsAct,1930,as–“wherethetransferofthepropertyinthegoods
istotakeplaceatafuturetimeorsubjecttosomeconditionthereaftertobefulfilled,thecontractiscalled
an agreement to sell.”
 Whenagreementtosellbecomessale:Anagreementtosellbecomesasalewhenthetimeelapsesor
theconditionsarefulfilledsubjecttowhichthe propertyinthegoodsistobetransferred.

Chapter-2 : Sale of Goods Act, 1930 - 57 -

Q4 State the Difference Between Sale and Agreement to Sell
Ans.
Basis of difference Sale Agreement to sell
Transfer of property Thepropertyinthegoodspassesto Propertyinthegoodspassestothe
the buyer immediately. buyer on futuredate oron fulfillment
of some condition.
Natureofcontract Itisanexecutedcontract.i.e.contract Itisanexecutorycontract.i.e.contract
forwhich consideration has been forwhichconsiderationistobepaidat
paid. afuture date.
Remedies for breach Thesellercansuethebuyerforthe Theaggrievedpartycansuefor
priceofthegoodsbecauseofthe damagesonlyandnotfortheprice,
passingofthepropertytherein tothe unlessthepricewaspayableata
buyer. stated date.
Liability of parties A subsequent lossor destruction of Suchloss or destruction isthe liability
thegoodsistheliability ofthebuyer. of the seller.
Burdenofrisk Riskoflossisthatofbuyersincerisk Riskoflossisthatofseller.
follows ownership.
Nature of rights CreatesJusinrem Creates Jusin personam
Right of resale The seller cannot resell the goods. Thesellermaysellthe goodssince
ownership is with the seller.

Q5 Define the Word Buyer and Seller.

Ans.
‘Buyer’ meansapersonwhobuysoragreestobuygoods[Section2(1)].
‘Seller’meansapersonwhosellsoragreestosellgoods[Section2(13)].Thetwoterms,‘buyer’and‘seller’
arecomplementaryandrepresentthetwopartiestoacontractofsaleofgoods.
Q6 Define the word Document of Title to goods and Document showing title to goods.
Ans.
“Documentoftitletogoods”includesbilloflading,dockwarrant,warehousekeeper’scertificate,wharfingers’
certificate,railwayreceipt,multimodaltransportdocument,warrantororderforthedeliveryofgoodsand
anyotherdocumentusedintheordinarycourseofbusinessasproofofthepossessionorcontrolofgoodsor
authorizingorpurportingtoauthorize,eitherbyendorsementorbydelivery,thepossessorofthedocument
totransferorreceivegoodstherebyrepresented. [Section2(4)]
However,thereisadifference between a ‘document showing title’ and ‘document of title’.Asharecertificate
isa‘document’showingtitlebutnotadocumentoftitle.Itmerelyshowsthatthepersonnamedintheshare
certificateisentitledtothesharerepresentedbyit,butitdoesnotallowthatpersontotransfertheshare
mentionedthereinbymereendorsementonthebackof thecertificateandthedeliveryofthecertificate.

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Q7 Explain in Detail Essential Elements of Contract of Sale
Ans.
Essential Elements of Contract of Sale:
Thefollowingelements must coexist soastoconstituteacontractofsaleofgoodsundertheSaleofGoods
Act,1930:
(i) Theremustbeatleasttwoparties,thesellerandthebuyer.
(ii) Thesubjectmatterofthecontract mustnecessarilybegoodscoveringonlymovableproperty.Itmay
beeither existinggoods,owned orpossessed bytheselleror future goods.
(iii) A price in money (not in kind) should be paid or promised. But there is nothing to prevent the
considerationfrombeingpartly inmoneyandpartlyinkind.
(iv) Atransferofpropertyingoodsfromsellertothebuyermusttakeplace.Thecontractofsaleismadeby
ano ertobuyorsellgoodsforapricebyonepartyandtheacceptanceofsuchoerbyother.
(v) Acontractofsalemaybeabsoluteorconditional.
(vi) Allotheressentialelementsofavalidcontractmustbepresentinthecontractofsale,e.g.competency
ofparties, legality of objectand considerationetc.
Q8 How a Contract of sale may be formed by parties?
Ans.
Ÿ Formation of Contract of Sale :
 AContractofsalemaybemadebyOffertobuyorsellbyonepersonandAcceptanceofsaleby
other person.
 ThereisNoAnyParticularformtocreateContractofSale.
 Thecontractofsalemaybeinformof;
o In writing,
o Bywordsofmouth,
o Partlyinwritingandpartlybywordsofmouth,
o Maybeimpliedbytheconductofparties.
 However,ifanyparticularformofcontractisprescribedinanyotherLaw,thencontractmustbe
enteredinthatparticularform.
 ThecontractmaybedoneinanyofthefollowingModes:
o Immediate delivery and immediate payment of price
o Immediate delivery and payment in future
o Immediate payment of price and delivery in future
o Deliveryatfutureandpaymentalsoatfuture
o Delivery in instalment and payment also in instalment.
Q9 Define the word Goods and Explain Various Classification of goods
Ans. “Goods”meanseverykindofmovablepropertyotherthanactionableclaimsandmoney;andincludes
stock andshares,growingcrops,grass,andthingsattachedtoorformingpartoftheland,whichare
agreedtobeseveredbeforesaleorunderthecontractofsale.[Section2(7)]

Chapter-2 : Sale of Goods Act, 1930 - 59 -

 Ÿ Classification of Goods:
1. Existing Goods:
a. Specific Goods
b. Unascertained Goods
c. Ascertained Goods
2. FutureGoods
3. Contingent Goods
1. Existing Goods :
EXISTING GOODS are such goods as are in existence at the time of the contract of sale, i.e., those
ownedorpossessedbytheselleratthetimeofcontractofsale(Section6).
Theexisting goodsmaybe of following kinds:
The existing goods may be classified in further following ways;
(a) Specific Goods :
Specific goods means goods identified and agreed upon at the time a contract of sale is made
[Section 2(14)].
(b) Unascertained Goods :
Unascertainedgoodsarethegoodswhicharenotspecificallyidentifiedorascertainedatthetime
ofmakingofthecontract.Theyareindicatedordefinedonlybydescriptionorsample.
(c) Ascertained Goods :
AscertainedGoodsarethosegoodswhichareidentifiedinaccordancewiththeagreementafter
thecontractofsaleismade.Whenfromalotoroutoflargequantityofunascertainedgoods,the
number or quantity contracted for is identified, such identified goods are called ascertained
goods.

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 2. Future Goods :
FUTURE GOODSmeansgoodstobemanufacturedorproducedoracquiredbytheselleraftermaking
the contract of sale [Section 2 (6)].
Acontractforthesaleoffuturegoodsisalwaysanagreementtosell.Itisneveractualsalebecausea
mancannottransferwhatisnotinexistence.
3. Contingent Goods :
CONTINGENT GOODS: The acquisitionof whichbythesellerdependsupon an uncertaincontingency
(uncertain event) are called ‘contingent goods’ [Section 6(2)].
Contingent goods also operate as ‘an agreement to sell’ and not a ‘sale’ so far as the question of
passingofpropertytothebuyerisconcerned.
Q10 What will be the effect on Contract of sale on Destruction of Goods under contract ?
Ans.
Goods perishing before making of contract (Section 7): Where there is a contract for the sale of specific
goods, the contract is void if the goods without the knowledge of the seller have, at the time when the
contractwasmade,perishedorbecomesodamagedasnolongertoanswertotheirdescriptioncontract.
Goods perishing before sale but after agreement to sell (Section 8): Wherethere isan agreementto sell
specific goods, and subsequently the goods without any fault on the part of the seller or buyer perish or
becomesodamagedasnolongertoanswertotheirdescriptionintheagreementbeforetheriskpassesto
the buyer, the agreement is thereby avoided.
Q11 Define Price and Describe Modes of Fixing Price.
Ans.
‘Price’meansthemonetaryconsiderationforsaleofgoods[Section2(10)].ByvirtueofSection9,theprice
inthecontractofsalemaybe
(1) fixedbythecontract,or
(2) agreedtobexedinamannerprovidedbythecontract,e.g.,byavaluer,or
(3) determined by the course of dealings between the parties.
Agreement to sell at valuation (Section 10):
(1) Wherethereisanagreementtosellgoodsonthetermsthatthepriceistobexedbythevaluationof
third party and such third partycannot or does notmakesuch valuation, the agreements is thereby
avoided:
Providedthat,ifthegoodsoranypartthereofhavebeendeliveredto,andappropriatedby,thebuyer,
heshallpayareasonable price therefore.
(2) Wheresuchthirdpartyispreventedfrommakingthevaluationbythefaultofthesellerorbuyer,the
partynotinfaultmaymaintainasuitfordamagesagainstthepartyindefault.
Q12 Explain Hirepurchase transaction in detail and State difference between sale and Hire purchase.
Ans.
Hire purchase agreements are governed by the Hirepurchase Act, 1972. Term “hirepurchase agreement”
meansanagreementunderwhichgoodsareletonhireandunderwhichthehirerhasanoptiontopurchase
theminaccordancewiththetermsoftheagreementandincludesanagreementunderwhich—
(a) Possessionofgoodsisdeliveredbytheownerthereoftoapersononconditionthatsuchpersonpays
the agreed amount in periodical instalments, and
Chapter-2 : Sale of Goods Act, 1930 - 61 -
 (b) Thepropertyinthegoodsistopasstosuchpersononthepaymentofthelastofsuchinstalments,and
(c) Suchpersonhasarighttoterminatetheagreementatanytimebeforethepropertysopasses;
Nonethelessasalehastobedistinguishedfromahirepurchaseastheirlegalincidentsarequitedifferent.
Themainpoints of distinction between the ‘sale’ and ‘hirepurchase’ are asfollows:
Basis of difference Sale Hire Purchase
Time of passing Propertyinthegoodsistransferredto Thepropertyingoodspassesto
property thebuyerimmediatelyatthetime of thehireruponpaymentofthelast
contract. installment.
Position of the party Thepositionofthebuyeristhatofthe Thepositionofthehireristhatofa
ownerofthegoods. baileetillhepaysthelastinstallment.
Termination of contract Thebuyercannotterminatethe Thehirermay,ifhesolikes,terminate
contractandisboundtopaytheprice thecontractbyreturningthegoodsto
of the goods. itsowner withoutanyliability topay
the remaining installments.
Burden of Risk of Thesellertakestheriskofanyloss Theownertakesnosuchrisk,forifthe
insolvency of the buyer resulting from the insolvency of the hirer failstopayaninstallment,the
buyer. ownerhasrighttotakebackthegoods.
Transfer of title Thebuyercanpassagoodtitletoa Thehirercannotpassanytitleevento
bonadepurchaserfromhim. abonafidepurchaser.
Resale Thebuyerinsalecanresellthegoods Thehirepurchaser cannot resell
unlesshehaspaidalltheinstallments.
Q13 Explain Bailment contract and State the difference between Sale and bailment.
Ans.
Ÿ Bailment Contract:
“It is a contract whereby One person ( known as Bailor ) transfers the possession of goods to another person
( known as Bailee ) for some specific purpose and the possession of goods will be returned back to bailor on
completion of purpose”.
 TheOwnerofgoodsisknownasBailor
 ThepersontowhomthepossessionisgivenisknownasBailee
 TheBailortransfers possession to Baileefor some specific purpose.
 It is the duty of bailee to take proper care of the goods delivered to him until the purpose is not
achieved.
 Thebaileeisliableforanyloss/damagesingoodsduetohisnegligence.
 Thebailmentcontractmaybewithorwithoutconsideration.BailmentisgovernedbyIndianContract
Act,1872.

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Difference Between Sale and Bailment:
Sr No Point Name Sale Bailment
1 Parties SellerandBuyer BailorandBailee
2 Transferof Immediatelyattimeof PropertyisnottransferredtoBailee(it
Property contract remainswithBailor)
3 Dutiesof Buyerholdsunconditional ItisdutyofBaileetotakepropercareofgoods.
possessionholder possessionofgoods. Thebaileeisliabletocompensatethelosses
Heisnothavinganyduty duetohisnegligence.
4 Returnofgoods Buyerisnotrequiredto Thebaileeisrequiredtoreturngoodstobailor
returngoodstoseller oncompletionofpurposeofbailment.
5 consideration Forsaleofgoods,the Bailmentisvalidevenwithorwithout
considerationisMust consideration.
Q14 State the difference between Sale, Barter and Exchange contract.
Ans.
Difference between Sale, barter and Exchange
Ÿ Sale :
 ExchangeofGoodsagainst money.
 E.g.AsoldhiscartoBforRs.500000
Ÿ Barter :
 Exchangeofgoodsagainstanothergoods
 E.g.AgivenhiscarofRs.500000toBagainst4BikesvaluedatRs.500000
Ÿ Exchange :
 Exchangeofonecurrencywithothercurrency
 E.g.AexchangedRs.1000000against$2000withICICIbank.
Q15 Explain the word “Pledge”
Ans.
Ÿ Pledge:
 IncaseofPledge,theGoodsaredeliveredbyOwners ofgoods( knownasPawner) toanother
person(knownasPawnee)forsecuritypurposeagainstrepaymentofloan.
 Iftheloanisrepaidontime,thegoodsgivenassecurityisreturnedbacktopawner
 However,iftheloanisnot repaid(defaultmadeby pawner)thepawneehasarighttosellthe
goodspledgedbypawnerforrecoveryofloanamount.

CLASS WORK

THEORETICAL QUESTIONS

1. Whatare theconsequencesof “destructionof goods”underthe SaleofGoodsAct,1930,wherethe

goods havebeendestroyedaftertheagreementtosellbutbeforethe saleisaffected.
2. Inwhatwaysdoesa“Sale”differfrom“HirePurchase”?
3. State briefly the essential element of a contract of sale under the Saleof Goods Act, 1930. Examine
whetherthereshouldbeanagreementbetweenthepartiesinordertoconstituteasaleunderthesaid
Act.

Chapter-2 : Sale of Goods Act, 1930 - 63 -

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 UNIT 2: CONDITIONS & WARRANTIES

Q16 Define the word Condition. Explain all Implied Conditions

Ans.
Ÿ “Condition”
“A condition is a stipulation essential to the main purpose of the contract, the breach of which gives a
right to cancel the contract”.
‘Conditions’ and ‘Warranties’ may be either express or implied.
Express conditions arethose,whichareagreeduponbetweenthepartiesatthetimeofcontractand
are expressly provided in the contract.
Theimplied conditions,ontheotherhand,arethose,whicharepresumedbylawtobepresentinthe
contract.
Itshouldbenotedthatanimpliedconditionmaybenegatedorwaivedbyanexpressagreement.
Implied Conditions: Following conditions are implied in a contract of sale of goods unless the
circumstancesof thecontract show adi erentintenon.
(i) Condition as to title [Section 14(a)].In every contract of sale, unless there is an agreement to the
contrary,thefirstimpliedconditiononthepartoftheselleristhat
(a) incaseofasale,hehasarighttosellthegoods,and
(b) in the case of an agreement to sell, he will have right to sell the goods at the time when the
propertyistopass.
(ii) Sale by description [Section 15]:Wherethereisacontractofsaleofgoodsbydescription,thereisan
implied condition that the goods shall correspond with the description.
Thebuyerisnotboundtoacceptandpayforthegoodswhicharenotinaccordancewiththedescription
of goods.
Itisaconditionwhichgoestotherootofthecontractandthebreachofitentitlesthebuyertoreject
thegoodswhetherthebuyerisabletoinspectthemornot.
(iii) Sale by sample [Section 17]:Inacontractofsalebysample,thereisanimpliedconditionthat
(a) thebulkshallcorrespondwiththesampleinquality;
(b) thebuyer shallhaveareasonableopportunityof comparingthebulkwiththesample,
(c) the goods shall be free from any defect rendering them unmerchantable, which would not be
apparentonreasonableexaminationofthesample.Thisconditionisapplicableonlywithregard
to defects, which could not be discovered by an ordinary examination of the goods. But if the
defectsarelatent,thenthebuyercanavoidthecontract.
(iv) Sale by sample as well as by description [Section 15]:Wherethegoodsaresoldbysampleaswellasby
descriptiontheimpliedconditionisthatthebulkofthegoodssuppliedshallcorrespondbothwiththe
sample and the description. In case the goods correspond with the sample but do not tally with
descriptionorviceversaorboth,thebuyercanrepudiatethecontract.
(v) Condition as to quality or fitness [Section 16(1)]: Ordinarily, there is noimplied condition as to the
qualityorfitnessofthegoodssoldforanyparticularpurpose.
However,theconditionastothereasonablefitnessofgoodsforaparticularpurposemaybeimpliedif
the buyer had made known to the seller the purpose of his purchase and relied upon the skill and
judgment of the seller to select the best goods and the seller has ordinarily been dealing in those
goods.Eventhisimpliedcondition willnotapply ifthegoodshavebeensoldunderatrademarkora
patent name.

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 (vi) Condition as to Merchantability [Section 16(2)]:Wheregoodsareboughtbydescriptionfromaseller
whodealsingoodsofthatdescription(whetherheisthemanufacturerorproducerornot),thereisan
implied condition that the goods shall be of merchantable quality.
Provided that, if the buyer has examined the goods, there shall be no implied condition as regards
defects which such examination ought to have revealed.
The expression “merchantable quality”, though not defined, nevertheless connotes goods of such a
quality and in such a condition a man of ordinary prudence would accept them as goods of that
description.
(vii) Condition as to wholesomeness:In the case of eatables and provisions, in addition to the implied
conditionastomerchantability,thereisanotherimpliedconditionthatthegoodsshallbewholesome.
Q17 Define the term Warranty. Explain All Implied Warranties
Ans.
Ÿ “Warranty”
“A warranty is a stipulation collateral to the main purpose of contract, the breach of which gives a right
to claim for damages only but not a right to cancel the contract”
The examination of Sections 14 and 16 of the Sale of Goods Act, 1930 discloses the following implied
warranties:
1. Warranty as to undisturbed possession [Section 14(b)]:Animpliedwarrantythatthebuyershall
haveandenjoyquietpossessionofthegoods.Thatistosay,ifthebuyerhavinggotpossessionof
thegoods,islaterondisturbedinhispossession,heisentitledtosuethesellerforthebreachof
thewarranty.
2. Warranty as to nonexistence of encumbrances [Section 14(c)]:Animpliedwarrantythatthegoods
shallbefreefromanychargeorencumbranceinfavourofanythirdpartynotdeclaredorknown
tothebuyerbeforeoratthetimethecontractisenteredinto.
3. Warranty as to quality or fitness by usage of trade [Section 16(3)]: An implied warranty as to
qualityorfitnessforaparticularpurposemaybeannexedorattachedbytheusageoftrade.
4. Disclosure of dangerous nature of goods: Wherethegoodsaredangerousinnatureandthebuyer
is ignorant of the danger, the seller must warn the buyer of the probable danger. If there is a
breachofwarranty, the seller may beliableindamages.
Q18 Can Implied conditions and warranties be Excluded? If yes, explain how ?
Ans.
Ÿ Exclusions of Implied conditions and warranties:
Sec62ofSOGAprovidesthatanyimpliedconditionsandwarrantiesmaybeexcludedinanycontractof
sale in following ways:
1. By Express Agreement:
 The seller may exclude his liability of any condition or warranty by way of express agreement
between buyer and seller.
2. By course of dealing:
 Course of dealing means, regularrepeated occurrence of similar transactions between parties.
 In such a situation, the parties may behave that certain conditions or warranties may be not
applicable to them.
3. By customs or Usage of trade:
 Customsorusageoftradeprevailinginaparticulartypeoftrademayallowthepartiestoexclude
their liability.

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Q19 State the Difference between Conditions and Warranties.
Ans.
Difference between condition and warranty
Point of differences Condition Warranty
Meaning A conditionisessentialtothemain Itisonlycollateraltothemain
purposeofthecontract. purposeofthecontract.
Rightincaseofbreach Theaggrievedpartycan repudiate Theaggrievedpartycanclaim
thecontractorclaimdamages onlydamagesincaseofbreach
orbothinthecaseofbreachof of warranty.
condition.
Conversion of stipulations Abreachofconditionmaybetreated Abreachofwarrantycannotbe
asabreachofwarranty. treatedasabreachofcondition.
Q20 Conditions may be treated as Warranty in which situations?
Ans.
Section13speciescaseswhereabreachofconditionbetreatedasabreachofwarranty.Asaresultofwhich
thebuyerloseshisrighttorescindthecontractandcanclaimfordamagesonly.
Inthefollowingcases,acontractisnotavoidedevenonaccountofabreachofacondition:
(i) Wherethebuyeraltogetherwaivestheperformanceofthecondition.Apartymayforhisownbenefit,
waive a stipulation.
(ii) Wherethebuyerelectstotreatthebreachoftheconditions,asoneofawarranty.Thatistosay,hemay
claimonlydamagesinsteadofrepudiatingthecontract.
Example:AagreestosupplyB10bagsoffirstqualitysugar@ `625perbagbutsuppliesonlysecond
qualitysugar,thepriceofwhichis`600perbag.Thereisabreachofconditionandthebuyercanreject
thegoods.Butifthebuyersoelects,hemaytreatitasabreachofwarranty,acceptthesecondquality
sugarandclaimdamages@`25perbag.
(iii) Wherethecontract isnonseverable andthebuyerhas acceptedeitherthewholegoodsoranypart
thereof.AcceptancemeansacceptanceasenvisagedinSection72oftheIndianContractAct,1872.
(iv) Where the fulfillment of any condition or warranty is excused by law by reason of impossibility or
otherwise.
Waiver of conditions
Voluntary Waiver Compulsory Waiver
• Waivesperformanceofcontract • Nonseverability of contract
• Electtotreatconditionaswarranty • Fulfillment of conditions excused by law
Q21 Explain in detail the Doctrine of Caveat Emptor. And describe Exceptions to the doctrine of Caveat
Emptor. [Sugg.Nov18, 6 Marks]
Ans.
In case of sale of goods, the doctrine ‘Caveat Emptor’ means ‘let the buyer beware’. When sellers display
theirgoodsintheopenmarket,itisforthebuyerstomakeaproperselectionorchoiceofthegoods.Ifthe
goodsturnouttobedefectivehecannotholdthesellerliable.Thesellerisinnowayresponsibleforthebad
selectionof thebuyer.Thesellerisnotboundtodisclosethedefectsinthegoods whichheisselling.
Itisthedutyofthebuyertosatisfyhimselfbeforebuyingthegoodsthatthegoodswillservethepurpose
forwhichtheyarebeingbought.Ifthegoodsturnouttobedefectiveordonotservehispurposeorifhe
depends on his own skill orjudgment, the buyer cannot hold the seller responsible.
TheruleofCaveatEmptorislaiddownintheSection16,whichstatesthat,“subjecttotheprovisionsofthis
Actorofanyotherlawforthetimebeinginforce,thereisnoimpliedwarrantyorconditionastothequality
orfitnessforanyparticularpurposeofgoodssuppliedunderacontractofsale”.

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 Exceptions:The doctrineof Caveat Emptor is, however, subject tothe following exceptions;
1. Fitness as to quality or use: Where the buyer makes known to the seller the particular purpose for
which the goods are required, so as to show that he relies on the seller’s skill or judgment and the
goodsareofadescriptionwhichisinthecourseofseller’sbusinesstosupply,itisthedutyoftheseller
tosupplysuchgoodsasarereasonablyfitforthatpurpose.
2. Goods purchased under patent or brand name: Incasewherethegoodsarepurchasedunderitspatent
nameorbrandname,thereisnoimpliedconditionthatthegoodsshallbefitforanyparticularpurpose
[Section 16(1)].
3. Goods sold by description:Wherethegoodsaresoldbydescriptionthereisanimpliedconditionthat
thegoodsshallcorrespondwiththedescription[Section15].Ifitisnotsothensellerisresponsible.
4. Goods of Merchantable Quality:Wherethegoodsareboughtbydescriptionfromasellerwhodealsin
goodsofthatdescriptionthereisanimpliedconditionthatthegoodsshallbeofmerchantablequality.
TheruleofCaveatEmptorisnotapplicable.Butwherethebuyerhasexaminedthegoodsthisruleshall
applyifthedefectsweresuchwhichoughttohavenotbeenrevealedbyordinaryexamination[Section
16(2)].
5. Sale by sample:Wherethegoodsareboughtbysample,thisruleofCaveatEmptordoesnotapplyif
thebulkdoesnotcorrespondwiththesample[Section17].
6. Goods by sample as well as description:Wherethegoodsareboughtbysampleaswellasdescription,
theruleofCaveatEmptorisnotapplicableincasethegoodsdonotcorrespondwithboththesample
anddescriptionoreitherofthecondition[Section15].
7. Trade Usage:Animpliedwarrantyorconditionastoqualityorfitnessforaparticularpurposemaybe
annexedby the usageof tradeand ifthe seller deviates from that, thisrule of Caveat Emptor is not
applicable [Section 16(3)].
8. Seller actively conceals a defect or is guilty of fraud: Wherethesellersellsthegoodsbymakingsome
misrepresentationorfraudandthebuyerreliesonitorwhentheselleractivelyconcealssomedefect
inthegoodssothatthesamecouldnotbediscoveredbythebuyeronareasonableexamination,then
theruleofCaveatEmptorwillnotapply.Insuchacasethebuyerhasarighttoavoidthecontractand
claim damages.

CLASS WORK

THEORETICAL QUESTIONS

1. Whatdoyouunderstandby“CaveatEmptor”undertheSaleofGoodsAct,1930?Whataretheexceptions
to this rule?
2. Whataretheimpliedconditionsinacontractof‘Salebysample’undertheSaleofGoodsAct,1930?
State alsothe implied warrantiesoperatives under thesaid Act.
3. “Thereisnoimpliedwarrantyorconditionastoqualityorfitnessforanyparticularpurposeofgoods
supplied under a contract of sale.”Discuss thesignificanceand Stateexceptions, if any.
4. Distinguishbetweena‘Condition’anda‘Warranty’inacontractofsale.Whenshalla‘breachofcondition’
betreatedas‘breachofwarranty’undertheprovisionsoftheSaleofGoodsAct,1930?Explain.

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 UNIT 3: TRANSFER OF OWNERSHIP AND DELIVERY OF GOODS

Q22 Specify the rules regarding transfer of Property in Goods for Specific Goods?
Ans.
1. Specific goods in a deliverable state (Section 20): Where there is an unconditional contract for the sale
ofspecificgoodsinadeliverablestate,thepropertyinthegoodspassestothebuyerwhenthecontract
ismade,anditisimmaterialwhetherthetimeofpaymentofthepriceorthetimeofdeliveryofthe
goods,orboth,ispostponed.
2. Specific goods to be put into a deliverable state (Section 21): Wherethereisacontractforthesaleof
specificgoodsandthesellerisboundtodosomethingtothegoods forthepurposeofputtingthem
intoadeliverablestate,thepropertydoesnotpassuntilsuchthingisdoneandthebuyerhasnotice
thereof.
3. Specific goods in a deliverable state, when the seller has to do anything thereto in order to ascertain
price (Section 22): Wherethereisacontractforthesaleofspecificgoodsinadeliverablestate,butthe
sellerisboundtoweigh,measure,testordosomeotheractorthingwithreferencetothegoodsfor
thepurposeofascertainingtheprice,thepropertydoesnotpassuntilsuchactorthingisdoneandthe
buyer has notice thereof.
Q23 Explain the rules for transfer of Property in case of Contract for sale of Unascertained goods?
Ans.
Ÿ Transfer of Ownership in case of sale of Unascertained Goods: (sec 23)
In case of sale of unascertained goods, ownership is transferred when both of the following conditions
are satisfied:
1. Goods are ascertained:
 It means, the processby which the goods to be delivered are identified andset apart.In other
words,itcanbesaidtobeselectingaparticulargoodsoutofgeneralgoods,attimeofdeliveryof
goods.
2. Goods are Appropriated to Buyer:
 Itmeans, finalselectionofgoods tobedeliveredbymutual consentof buyerandseller.
 Thegoods maybeselectedeitherbysellerorbuyerwithconsentofeitherparty.
 Theconsentmaybebeforeorafterappropriation,
 Alsoconsentmaybeoralorwritten.
Q24 Describe the rules for transfer of property in case of goods sold on Sale or Return basis?
Ans.
Whengoodsaredeliveredtothebuyeronapprovalor“onsaleorreturn”orothersimilarterms,theproperty
thereinpassesto the buyer
(a) whenhesignifieshisapprovaloracceptancetothesellerordoesanyotheractadoptingthetransaction;
(b) if he does not signify his approval or acceptance to the seller but retains the goods without giving
noticeofrejection,then,ifatimehasbeenxedforthereturnofthegoods,ontheexpirationofsuch
time,and,ifnotimehasbeenxed,ontheexpirationofareasonabletime;or
(c) hedoessomethingtothegoodwhichisequivalenttoacceptingthegoodse.g.hepledgesorsellsthe
goods.

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 A buyer under acontracton the basisof ‘saleor return’ is deemed to have exercisedhisoption when he
doesanyactexercisingdominationoverthegoodsshowinganunequivocalintentiontobuy,example,ifhe
pledgesthegoodswithathirdparty.Failureorinabilitytoreturnthegoodstothesellerdoesnotnecessarily
imply selection to buy.
Sale for cash only or Return
Itmaybenotedthatwherethegoodshavebeendeliveredbyapersonon“saleorreturn”onthetermsthat
thegoodsweretoremainthepropertyofthesellertilltheyarepaidfor,thepropertythereindoesnotpass
tothebuyeruntilthetermsarecompliedwith,i.e.,cashispaidfor.
Q25 Explain the rules for transfer of property in case of Reservation of right to disposal by seller?
Ans. Reservation of right to disposal (Section 25)
Thissectionpreservestherightofdisposalofgoodstosecurethatthepriceispaidbeforethepropertyin
goodspassestothebuyer.
Wherethereiscontractofsaleofspecificgoodsorwherethegoodshavebeensubsequentlyappropriated
tothecontract,thesellermay,bythetermsofthecontractorappropriation,asthecasemaybe,reservethe
righttodisposeofthegoods,untilcertainconditionshavebeenfulfilled.Insuchacaseinspiteofthefact
thatthegoodshave alreadybeendeliveredtothebuyerortoacarrieror otherbaileeforthepurposeof
transmittingthesametothebuyer,thepropertythereinwillnotpasstothebuyertilltheconditionimposed,
if any, by the seller has been fulfilled.
Circumstances under which the right to disposal may be reserved:Inthefollowingcircumstances,selleris
presumedtohave reserved therightofdisposal:
(1) Ifthegoodsareshippedordeliveredtoarailwayadministrationforcarriageandbythebillofladingor
railwayreceipt,asthe casemaybe,thegoodsaredeliverabletotheorderofthesellerorhis agent,
thenthesellerwillbeprimafaciedeemedtohavereservedtotherightofdisposal.
(2) Wherethesellerdrawsabillonthebuyerforthepriceandsendstohimthebillofexchangetogether
with the bill of lading or (as the case may be) the railway receipt to secure acceptance or payment
thereof,thebuyermustreturnthebilloflading,ifhedoesnotacceptorpaythebill.
Q26 Who has to bear the risk of goods in a contract of sale. Pls explain in detail.
Ans.
 Risk prima facie passes with ownership: Theownerofgoodsmustbearthelossordamageofgoods
unlessotherwiseisagreedto.UnderSection26oftheSaleofGoodsAct,unlessotherwiseagreed,the
goods remain attheseller’sriskuntilpropertytherein haspassedtothebuyer.Afterthat eventthey
areatthebuyer’srisk,whetherdeliveryhasbeenmadeornot.
 The aforesaid rule is, however, subject to two qualifications:
(i) Ifdeliveryhasbeendelayedbythefaultofthesellerorthebuyer,thegoodsshallbeattheriskof
thepartyindefault,asregardslosswhichmightnothavearisenbutforthedefault.
(ii) Thedutiesandliabilitiesof thesellerorthebuyerasbaileeofgoods fortheotherpartyremain
una ectedeven whenthe risk has passed generally.
Q27 Explain the rule of “NemoDat Quod nonhabet” and also explain Exception to the rule. OR what is the
rule of transfer of title. Explain exception to transfer of title.
Ans.
Thegeneralruleregardingthetransferoftitleisthatthesellercannottransfertothebuyerofgoodsabetter
title than hehimself has.Iftheseller isnot theownerof goods, then the buyer alsowillnot becomethe
owner i.e. the title of the buyer shall be the same as that of the seller. This rule is expressed in the Latin
maxim“Nemodatquodnonhabet”whichmeansthatnoonecangivewhathehasnotgot.
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 If this rule is enforced rigidly then the innocent buyers may be put to loss in many cases. Therefore, to
protecttheinterestsof innocentbuyers,anumberof exceptionshavebeenprovided tothisrule.
Exceptions:Inthefollowingcases,anonownercanconveybettertitletothebonadepurchaserofgoodsfor
value.
(1) Sale by a Mercantile Agent:Asalemadebyamercantileagentofthegoodsfordocumentoftitleto
goodswouldpassagoodtitletothebuyerinthefollowingcircumstances;namely;
(a) Ifhewasinpossessionofthegoodsordocumentswiththeconsentoftheowner;
(b) Ifthesalewasmadebyhimwhenactingintheordinarycourseofbusinessasamercantileagent;
and
(c) Ifthebuyerhadactedingoodfaithandhasatthetimeofthecontractofsale,nonoticeofthefact
thatthesellerhadnoauthoritytosell(ProvisotoSection27).
(2) Sale by one of the joint owners (Section 28): If one of several joint owners of goods has the sole
possession of them by permission of the coowners, the property in the goods is transferred to any
personwhobuysthemofsuchjointowneringoodfaithandhasnotatthetimeofthecontractofsale
noticethatthesellerhasnoauthoritytosell.
(3) Sale by a person in possession under voidable contract:Abuyerwouldacquireagoodtitletothegoods
sold to him by a seller who had obtained possession of the goods under a contract voidable on the
ground of coercion, fraud, misrepresentaon or undue in uence provided that the contract had not
beenrescindeduntilthetimeofthesale(Section29).
(4) Sale by one who has already sold the goods but continues in possession thereof : Ifapersonhassold
goodsbutcontinuestobeinpossessionofthemorofthedocumentsoftitletothem,hemaysellthem
toathirdperson,andifsuchpersonobtainsthedeliverythereofingoodfaithandwithoutnoticeof
theprevioussale,hewouldhavegoodtitletothem,althoughthepropertyinthegoodshadpassedto
thefirstbuyerearlier.Apledgeorotherdispositionofthegoodsordocumentsoftitlebythesellerin
possession are equally valid [Section 30(1)].
(5) Sale by buyer obtaining possession before the property in the goods has vested in him:Whereabuyer
withtheconsentofthesellerobtainspossessionofthegoodsbeforethepropertyinthemhaspassed
to him,he may sell, pledge or otherwise dispose of the goods to a third person, and if such person
obtainsdeliveryofthegoodsingoodfaithandwithoutnoticeofthelienorotherrightoftheoriginal
sellerinrespectofthegoods,hewouldgetagoodtitletothem[Section30(2)].
However,apersoninpossessionofgoodsundera‘hirepurchase’agreementwhichgiveshimonlyan
optiontobuyisnotcoveredwithinthesectionunlessitamountstoasale.
(6) Effect of Estoppel:Wheretheownerisestoppedbytheconductfromdenyingtheseller’sauthorityto
sell,thetransfereewillgetagoodtitleasagainstthetrueowner.But beforeagoodtitlebyestoppel
canbemade,itmustbeshownthatthetrueownerhadacvelysu eredorheldouttheotherperson
inquestionasthetrueownerorasapersonauthorizedtosellthegoods.
(7) Sale by an unpaid seller: Where an unpaid seller who had exercised his right of lien or stoppage in
transit resells the goods, the buyer acquires a good title to the goods as against the original buyer
[Section54(3)].
(8) Sale under the provisions of other Acts:
(i) SalebyanOfficialReceiverorLiquidatoroftheCompanywillgivethepurchaseravalidtitle.
(ii) Purchaseofgoodsfromafinderofgoodswillgetavalidtitleundercircumstances[Section169of
theIndianContractAct,1872]
(iii) A sale bypawnee can convey agoodtitleto the buyer [Section 176 of the Indian Contract Act,
1872].

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Q28 Define the word Delivery and explain modes of delivery of goods.
Ans.
Delivery  its forms and derivatives: Delivery means voluntary transfer of possession from one person to
another[Section2(2)]. Asageneralrule,deliveryof goodsmaybemadebydoinganything,whichhasthe
e ect of pung the goods in the possession of the buyer, or any person authorized to hold them on his
behalf.
Forms of delivery:Followingarethekindsofdeliveryfortransferofpossession:
Delivery of goods
Voluntary transfer of possession by one person to
another
Actual Constructive Symbolic
delivery delivery delivery
(i) Actual delivery:Whenthe goodsarephysicallydelivered tothebuyer.
(ii) Constructive delivery: Whenitise ectedwithoutanychangeinthecustodyoractualpossessionof
the thing as in the case of delivery by attornment (acknowledgment) e.g., wherea warehouseman
holdingthegoodsofAagreestoholdthemonbehalfofB,atA’srequest.
(iii) Symbolic delivery: When there is a delivery of a thing in token of a transfer of something else,  i.e.,
deliveryofgoodsinthecourseoftransitmaybemadebyhandingoverdocumentsoftitletogoods,like
bill of lading or railway receipt or delivery orders or the key of a warehouse containing the goods is
handedovertobuyer.
Q29 Specify in detail the rules of Delivery of goods.
Ans.
Rules Regarding Delivery of goods (Section 3341)
TheSaleofgoodAct,1930prescribesthefollowingrulesofdeliveryofgoods:

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 (i) Delivery (Section 33): Deliveryofgoodssoldmaybemadebydoinganythingwhichthepartiesagree
shallbetreatedasdeliveryorwhichhasthee ectofpungthegoodsinthepossessionofthebuyer
orofanypersonauthorisedtoholdthemonhisbehalf.
(ii) Effect of part delivery: Adeliveryofpartofgoods,inprogressofthedeliveryofthewholehasthesame
e ect,forthepurposeofpassingthepropertyinsuchgoods,asadeliveryofthewhole;butadelivery
ofpartofthegoods,withanintentionofseveringitfromthewhole,doesnotoperateasadeliveryof
theremainder.(Section 34)
(iii) Buyer to apply for delivery: Apartfromanyexpresscontract,thesellerofgoodsisnotboundtodeliver
themuntil thebuyerappliesfor delivery. (Section 35)
(iv) Place of delivery: Whetheritisforthebuyertotakepossessionofthegoodsorforthesellertosend
themtothebuyerisaquestiondependingineachcaseonthecontract,expressorimplied,between
theparties.Apartfromanysuchcontract,goodssoldaretobedeliveredattheplaceatwhichtheyare
atthetimeofthesale,andgoodsagreedtobesoldaretobedeliveredattheplaceatwhichtheyare
at the time of the agreement to sell or if not then in existence, at the place at which they are
manufacturedorproduced.[Section 36(1)]
(v) Time of delivery: Whereunderthecontractofsalethesellerisboundtosendthegoodstothebuyer,
but no time for sending them is xed, the seller is bound to send them within a reasonable time.
[Section 36(2)]
(vi) Goods in possession of a third party: Wherethegoodsatthetimeofsaleareinpossessionofathird
person,thereisnodeliveryunlessanduntilsuchthirdpersonacknowledgestothebuyerthatheholds
thegoodsonhisbehalf.Providedthatnothinginthisseconshalla ecttheoperaonoftheissueor
transferofanydocumentoftitletogoods.[Section 36(3)]
(vii) Time for tender of delivery: Demandortenderofdeliverymaybetreatedasine ectualunlessmade
atareasonablehour.Whatisreasonablehourisaquestionoffact.[Section 36(4)].
(viii) Expenses for delivery: The expenses of and incidental to putting the goods into a deliverable state
mustbebornebythesellerintheabsenceofacontracttothecontrary.[Section 36(5)].
(ix) Delivery of wrong quantity [Section 37]: Wherethesellerdeliverstothebuyeraqualityofgoodsless
thanhecontractedtosell,thebuyermayrejectthem,butifthebuyeracceptsthegoodssodelivered
heshallpayforthematthecontractrate.[Subsection (1)]
Wherethesellerdeliverstothebuyeraquantityofgoodslargerthanhecontractedtosell,thebuyer
mayacceptthegoodsincludedinthecontractandrejecttherest,orhemayreject thewhole.Ifthe
buyeracceptsthewholeofthegoodssodelivered,heshallpayforthematthecontractrate.[Subsection
(2)]
Wherethesellerdeliverstothebuyerthegoodshecontractedtosellmixedwithgoodsofadi erent
descriptionnotincludedinthecontract,thebuyermayacceptthegoodswhichareinaccordancewith
thecontractandreject,ormayrejectthewhole.[Subsection (3)]
Theprovisionsofthissectionaresubjecttoanyusageoftrade,specialagreementorcourseofdealing
between the parties. [Subsection (4)]
(x) Instalment deliveries: Unlessotherwiseagreed,thebuyerisnotboundtoacceptdeliveryininstallments.
Therightsandliabilitiesincasesofdeliverybyinstallmentsandpaymentsthereonmaybedetermined
bythepartiesofcontract.(Section 38)
(xi) Delivery to carrier: Subject to the terms of contract, the delivery of the goods to the carrier for
transmissiontothebuyer,isprima facie deemedtobedeliverytothebuyer.[Section 39(1)]

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 (xii) Deterioration during transit: Wheregoodsaredeliveredatadistantplace,theliabilityfordeterioration
necessarilyincidentaltothecourseoftransitwillfallonthebuyer,thoughtheselleragreestodeliver
athisownrisk.(Section 40)
(xiii) Buyer right to examine the goods: Wheregoodsaredeliveredtothebuyer,whohasnotpreviously
examined them, he is entitled to a reasonable opportunity of examining them in order to ascertain
whether they are in conformity with the contract. Unless otherwise agreed, the seller is bound, on
request,toa ord thebuyerareasonableopportunityofexaminingthegoods.(Secon41)
Rule related to Acceptance of Delivery of Goods (Section 42): Thebuyeris deemed tohaveacceptedthe
goodswhenheintimatestothesellerthathehasacceptedthem,orwhenthegoodshavebeendelivered
to him and he does any act in relation to them which is inconsistent with the ownership of the seller, or
when,afterthelapseofareasonabletime,heretainsthegoodswithoutintimatingtothesellerthathehas
rejected them.
Analysis:
Acceptanceisdeemedtotakeplacewhenthebuyer
(a) intimatestothesellerthathehadacceptedthegoods;or
(b) doesanyacttothegoods,whichisinconsistentwiththeownershipoftheseller;or
(c) retains the goods after the lapse of a reasonable time, without intimating to the seller that he has
rejected them.
Buyer not bound to return rejected goods (Section 43): Unlessotherwiseagreed,wheregoodsaredelivered
tothebuyerandherefusestoacceptthem,havingtherightsotodo,heisnotboundtoreturnthemtothe
seller,butitissufficientifheintimatestothesellerthatherefusestoacceptthem.
Liability of buyer for neglecting or refusing delivery of goods (Section 44): When theseller is ready and
willingtodeliverthegoodsandrequeststhebuyertotakedelivery,andthebuyerdoesnotwithinareasonable
time after such request take deliveryof thegoods, he is liable to the seller for any loss occasioned by his
neglectorrefusaltotakedeliveryandalsoforareasonablechargeforthecareandcustodyofthegoods.
Providedfurtherthatnothinginthissectionshallaffecttherightsofthesellerwheretheneglectorrefusal
ofthebuyertotakedeliveryamountstoarepudiationofthecontract.
Q30 Explain the rules regarding Seatransit
Ans.
Ÿ Rules regarding Sea – Transit : Followingarethreeimportantformsofcontractofsalewhichinvolves
carriagebyseatransit:
1. C.I,F Contract:
 ThetermCIFmeans“Cost,InsuranceandFreight”
 Itisacontractforsaleofgoodsatpricewhichincludesthecostofgoods,insuranceandfreight
charges.
 Thus,chargesoftransitinsuranceandfreightchargesarebornebybuyer.
2. F.O.B contract:
 ThetermFOBmeans“FreeonBoard”
 Itisacontractforsaleofgoodswherethesellerhastoputgoodsonboardofashipathisownexpense
for transport.

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 Â Thesellerhastobearonlyexpenseofloadinggoodsonship.
 After loading goods, all risk lying with buyer and buyer is liable to pay insurance, freight and all
subsequent expense.
3. Exship Contract:
 Itisacontractforsaleofgoodsinwhichthesellerhastodeliverthegoodstothebuyerattheport
of destination.
 Thefreightchargesaretobebornebyseller.Duringseatransittheriskisofseller.
 Thus,thesellermayinsurethegoodsforprotectionofhisownrisk.

CLASS WORK

THEORETICAL QUESTIONS

1. “Nemo Dat Quod Non Habet” – “None can give or transfer goods what he does not himself own.”
ExplaintheruleandstatethecasesinwhichtheruledoesnotapplyundertheprovisionsoftheSaleof
GoodsAct,1930.
2. WhataretherulesrelatedtoAcceptanceofDeliveryofGoods?

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 UNIT 4: UNPAID SELLER

Q31 Explain the meaning of Unpaid Seller

Ans.
According to Section 45(1) of the Sale of Goods Act, 1930 the seller of goods is deemed to be an ‘ Unpaid
Seller’ when
(a) Thewholeofthepricehasnotbeenpaidortenderedandthesellerhadanimmediaterightofaction
fortheprice.
(b) whenabillofexchangeorothernegotiableinstrumenthasbeenreceivedasconditionalpayment,and
the condition on which it was received has not been fulfilled by reason of the dishonour of the
instrument or otherwise.
Theterm'seller'hereincludesanypersonwhoisinthepositionofaseller,as,forinstance,anagent
of the seller to whom thebill of lading hasbeen endorsed, or a consignor or agent who hashimself
paid, or isdirectly responsible for, theprice [Section45(2)].
Q32 State the Rights of Unpaid seller against Goods? OR Explain Unpaid Seller’s Right of Lien OR Explain
Unpaid seller’s Right of Stoppage in Transit OR State difference between Right of Lien and Stoppage in
transit.
Ans.
(1) Seller's lien (Section 47): Accordingtosubsection(1),subjecttotheprovisionsofthisAct,theunpaid
sellerofgoodswhoisinpossessionofthemisentitledtoretainpossessionofthemuntilpaymentor
tenderof theprice inthe followingcases, namely:
(a) wherethegoodshavebeensoldwithoutanystipulationastocredit;
(b) wherethegoodshavebeensoldoncredit,butthetermofcredithasexpired;
(c) where the buyer becomes insolvent.
According to subsection (2), the seller may exercise his right of lien notwithstanding that he in possession
of the goods as agent or bailee for the buyer.
Part delivery (Section 48): Where an unpaid seller has made part delivery of the goods, he may exercise
his right of lien on the remainder, unless such part delivery has been made under such circumstances as
to show an agreement to waive the lien.
Termination of lien (Section 49): Accordingtosubsection(1),theunpaidsellerofgoodsloseshislien
thereon
(a) when he delivers the goods to a carrieror other bailee for the purpose of transmissionto the
buyerwithoutreservingtherightofdisposalofthegoods;
(b) whenthebuyerorhisagentlawfullyobtainspossessionofthegoods;
(c) by waiver thereof.
The unpaid seller of goods, having a lien thereon, does not lose his lien by reason only that he has
obtainedadecreeforthepriceofthegoods.[Subsection(2)]
(2) Right of stoppage in transit (Section 50 to 52):
Therightofstoppageintransitmeanstherightofstoppingthegoodswhiletheyareintransit,toregain
thepossessionandtoretainthemtillthefullpriceispaid.
Whentheunpaidsellerhaspartedwiththegoodstoacarrierandthebuyerhasbecomeinsolvent,he
canexercisethisrightofaskingthecarriertoreturnthegoodsback,ornottodeliverthegoodstothe
buyer.

Chapter-2 : Sale of Goods Act, 1930 - 83 -

 This right is the extension of the right of lien because it entitles the seller to regain possession even
whenthesellerhaspartedwiththepossessionofthegoods.
However, the right of stoppage in transit is exercised only when the following conditionsare fulfilled:
(a) Thesellermust beunpaid.
(b) Hemusthavepartedwiththepossessionofgoods.
(c) Thegoodsareintransit.
(d) The buyer has become insolvent.
(e) TherightissubjecttoprovisionsoftheAct.[Section50]
Duration of transit:Thegoodsaredeemedtobeincourseoftransitfromthetimewhentheyaredelivered
toacarrierorotherbaileeforthepurposeoftransmissiontothebuyer,untilthebuyerorhisagentinthat
behalftakesdeliveryofthemfromsuchcarrierorotherbailee.
When does the transit come to an end ?
Therightofstoppageintransitislostwhentransitcomestoanend.Transitcomestoanendinthefollowing
cases:
• Whenthe buyeror other bailee obtainsdelivery.
• Buyer obtainsdelivery beforethearrival of goodsatdestination.
• Wherethecarrierorotherbaileeacknowledgestothebuyerorhisagentthatheholdsthegoodsas
soon as thegoods are loadedon the ship, unlessthe seller hasreserved the right of disposal of the
goods.
• Ifthecarrierwrongfullyrefusestodeliverthegoodstothe buyer.
• Wheregoodsaredeliveredtothecarrierhiredbythebuyer,thetransitcomestoanend.
• Wherethepartdeliveryofthegoodshasbeenmadetothebuyer,therethetransitwillcometoanend
fortheremaininggoodswhichareyetinthecourseoftransmission.
• Wherethegoodsaredeliveredtoashipcharteredbythebuyer,thetransitcomestoanend.[section
51]
How stoppage in transit is effected:Therearetwomodesofstoppageintransit

Wherethenoticeofstoppageintransitisgivenbythesellertothecarrierorotherbaileeinpossessionofthe
goods,heshallredeliverthegoodsto,oraccordingtothedirectionsof,theseller.Theexpensesofsuchre
deliveryshall beborne by the seller.
Distinction between Right of Lien and Right of Stoppage in Transit
(i) Theessenceofarightoflienistoretainpossessionwhereastherightofstoppageintransitisrightto
regain possession.

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 (ii) Seller should be in possession of goods under lien while in stoppage in transit (i) seller should have
parted with the possession (ii) possession should be with a carrier, &(iii) buyer has not acquired the
possession.
(iii) Rightofliencanbeexercisedevenwhenthebuyerisnotinsolventbutitisnotthecasewithrightof
stoppage in transit.
(iv) Rightofstoppageintransitbeginswhentherightoflienends.Thustheendoftherightoflienisthe
startingpointoftherightofstoppageintransit.

Effects of subsale or pledge by buyer (Section 53):Therightoflienorstoppageintransitisnota ectedby

thebuyersellingorpledgingthegoodsunlessthesellerhasassentedtoit.Thisisbasedontheprinciplethat
asecondbuyercannotstandinabetterpositionthanhisseller.(Thefirstbuyer).
Therightofstoppageisdefeatedifthebuyerhastransferredthedocumentoftitleorpledgesthegoodsto
asubbuyeringoodfaithandforconsideration.
Exceptions:(a)Whenthesellerhasassentedtothesale,mortgageorotherdispositionofthegoodsmade
bythebuyer.
(b) When a document of title to goods has been transferred to the buyer and the buyer transfers the
documents to a person who has bought goods in good faith and for value i.e. for price, then, the
provision of subsection (1) stipulates as follows:
(i) Ifthelastmentionedtransferisbywayofsale,rightoflienorstoppageintransitisdefeated,or
(ii) Ifthelastmentionedtransferisbywayofpledge,unpaidseller’srightoflienorstoppageonlybe
exercised, subject to the rights ofthe pledges.
However,thepledgeemayberequiredbytheunpaidsellertouseinthefirstinstance,othergoodsor
securities of the pledgeravailable tohim to satisfyhisclaims. [Subsection (2)]
Effect of stoppage:Thecontractofsaleisnotrescindedwhenthesellerexerciseshisrightofstoppage
intransit.Thecontractstillremainsinforceandthebuyercanaskfordeliveryofgoodsonpaymentof
price.
(3) Right of resale [Section 54]:
Theunpaidsellercan exercisetheright toresellthe goodsunder thefollowing conditions:
(i) Where the goods are of a perishable nature: In such a case the buyer need not be informed of the
intention of resale.
(ii) Where he gives notice to the buyer of his intention to resale the goods: Ifafterthereceiptofsuch
notice the buyer fails within a reasonable time to pay or tender the price, the seller may resell the
goods.
Itmaybenotedthatinsuchcases,ontheresaleofthegoods,thesellerisalsoentitledto:
(a) Recover the difference between the contract price and resale price, from the original buyer, as
damages.
(b) Retaintheprofitiftheresalepriceishigherthanthecontractprice.
It may also be noted that the seller can recover damages and retain the profits only when the goods are
resoldaftergivingthenoticeofresaletothebuyer.Thus,ifthegoodsareresoldbythesellerwithoutgiving
anynocetothebuyer,thesellercannotrecoverthelosssu eredonresale.Moreover,ifthereisanyprot
onresale,hemustreturnittotheoriginalbuyer,i.e.hecannotkeepsuchsurpluswithhim[Section54(2)].

Chapter-2 : Sale of Goods Act, 1930 - 85 -

 4. Unpaid seller’s right of Withholding delivery of goods:
 Iftheownershipofgoodsisnottransferredtobuyer,thesellermayexerciserightofwithholding
delivery of goods.
 Ifbuyerfailstopaypriceorbecomesinsolventbeforepaymentofprice,thesellermayrefuseto
deliver goods to buyer.
Thisrightissimilartonatureofunpaidseller’srightoflien.

Q33 State the rights of Unpaid seller against Buyer?

Ans.
The right against the buyer are as follows:
1. Suit for price (Section 55)
(a) Whereunderacontractofsalethepropertyinthegoodshaspassedtothebuyerandthebuyer
wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the
sellermaysuehimforthepriceofthegoods.[Section55(1)]
(b) Whereunderacontractofsalethepriceispayableonadaycertainirrespectiveofdeliveryand
thebuyer wrongfully neglectsorrefusestopaysuch price,the sellermaysue himfor theprice
althoughthepropertyinthegoodshasnotpassedandthegoodshavenotbeenappropriatedto
thecontract.[Section55(2)].
2. Suit for damages for nonacceptance (Section 56):Wherethebuyerwrongfullyneglectsorrefusesto
accept and pay for the goods, the seller may sue him for damages for nonacceptance. As regards
measureofdamages,Section73oftheIndianContractAct,1872applies.
3. Repudiation of contract before due date (Section 60): Wherethebuyerrepudiatesthecontractbefore
thedateofdelivery,thesellermaytreatthecontractasrescindedandsuedamagesforthebreach.This
isknownasthe‘ruleofanticipatorybreachcontract’.
4. Suit for interest [Section 61]: Wherethereisspecificagreementbetweenthesellerandthebuyerasto
interest on the price of the goods from the date on which payment becomes due, the seller may
recover interest from the buyer. If, however, there isno specic agreement to this e ect, the seller
maychargeinterestonthepricewhenitbecomesduefromsuchdayashemaynotifytothebuyer.
Intheabsenceofacontracttothecontrary,theCourtmayawardinteresttothesellerinasuitbyhim
atsuchrateasitthinksfitontheamountofthepricefromthedateofthetenderofthegoodsorfrom
the date on which the price was payable.
Q34 What is “Auction Sale” ? Explain certain rules for Auction sale.
Ans.
AUCTION SALE (SECTION 64)
An‘AuctionSale’isamodeofsellingpropertybyinvitingbidspubliclyandthepropertyissoldtothehighest
bidder.AnauctioneerisanagentgovernedbytheLawofAgency.Whenhesells,heisonlytheagentofthe
seller. He may, however, sell his own property as the principal and need not disclose the fact that he is so
selling.
Rules of Auction sale: Section64oftheSaleofGoodsAct,1930providesfollowingrulestoregulatethesale
by auction:
(a) Where goods are sold in lots: Wheregoodsareputupforsaleinlots,eachlotisprimafaciedeemedto
besubjectofaseparatecontractofsale.
(b) Completion of the contract of sale: Thesaleiscompletewhentheauctioneerannouncesitscompletion
bythe fallofhammeror in anyother customarymannerand untilsuchannouncementis made,any
biddermayretractfromhisbid.
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 (c) Right to bid may be reserved: Righttobidmaybereservedexpresslybyoronbehalfofthesellerand
wheresucharightisexpresslyreserved,butnototherwise,theselleroranyonepersononhisbehalf
maybidattheauction.
(d) Where the sale is not notified by the seller:Wherethesaleisnotnotifiedtobesubjecttoarighttobid
onbehalfoftheseller,itshallnotbelawfulforthesellertobidhimselfortoemployanypersontobid
atsuchsale,orfortheauctioneerknowinglytotakeanybidfromtheselleroranysuchperson;andany
salecontravening thisrule maybe treatedas fraudulent by the buyer.
(e) Reserved price:Thesalemaybenotifiedtobesubjecttoareserveorupsetprice;and
(f) Pretended bidding: Ifthesellermakesuseofpretendedbiddingtoraisetheprice,thesaleisvoidable
attheoptionofthebuyer.
Q35 Explain the specific terms used in Auction sale.
Ans.
Ÿ Knockout Agreement:
 Itmeans,anagreementbetweensomeofbiddersnottobidagainsteachother.
 Thebidders makesuchagreement to avoid competition between them.
 They form a close group among themselves and may form a strategy against other bidders to
obtaingoodsunderauction.
 Theymayagreethatonlyonepersonwillbidonbehalfofwholegroup.
 Andtheymaydecidetodistributethegoodspurchasedbythem.
 Suchagreementistreatedvalidin eyesoflaw.
Ÿ Damping:
 Itis anunlawfulactbywhich intendingpurchaserisprevented frombidding.
 Thedamping isusually done by pointingout defectsin goodsto be sold,orbytakingintending
buyeroutofauctionbyanyotherways.
 Itshouldbenotedthatdampingisillegalandauctioneercanwithdrawgoodsfromauction.
Ÿ Puffers:
 Puffermaybe definedasaperson whoisemployed bythe seller toraisethe price byfictitious
bbids.
 Apufferhasnointentiontobuygoods.
 Puffers are also known as “bybidders”, “whitebonnets”, “decoyducks”
Q36 Define “Contract for Work and Labor”.
Ans.
Ÿ Contract for Work and Labour:
 Itissuchacontractwherethemainconsiderationispersonalskillortalentofaperson.
 Insuchtypeofcontract,thematerialorgoodsinvolvedisofimmaterialorminorvalue.
 Themainvalueisofskillortalentofaperson.
 Inspiteofgoodsandskillbothareinvolvedinsamecontract,thevalueofgoodsincontractisvery
minorwhilethemajororprobablywholevalueisofpersonalskillofaperson.
Q37 What are the remedies of Buyer against Seller in case of Breach of Contract by Seller?
Ans.
1. Damages for nondelivery [Section 57]: Wherethesellerwrongfullyneglectsorrefusestodeliverthe
goods tothe buyer,thebuyermaysuethesellerfordamagesfor nondelivery.
Chapter-2 : Sale of Goods Act, 1930 - 87 -
 2. Suit for specific performance (Section 58):Wherethesellercommitsofbreachofthecontractofsale,
thebuyercanappealtothecourtforspecificperformance.Thecourtcanorderforspecificperformance
onlywhenthegoodsareascertainedorspecific.
Example:‘A’agreedtosellararepaintingofMughalperiodto‘B’.Butontheduedateofdelivery,‘A’
refusedtosellthesame.Inthiscase,‘B’mayleasuitagainst‘A’forobtaininganorderfromtheCourt
tocompel‘A’toperformthecontract(i.e.todeliverthepaintingto‘B’attheagreedprice).
3. Suit for breach of warranty (section 59):Wherethereisbreachofwarrantyonthepartoftheseller,or
wherethebuyerelectstotreatbreachofconditionasbreachofwarranty,thebuyerisnotentitledto
rejectthegoodsonlyonthebasesofsuchbreachofwarranty.Buthemay–
(i) setupagainstthesellerthebreachofwarrantyindiminutionorextinctionoftheprice;or
(ii) suethesellerfordamagesforbreachofwarranty.
4. Repudiation of contract before due date (Section 60): Whereeitherpartytoacontractofsalerepudiates
thecontractbeforethedateofdelivery,theothermayeithertreatthecontractassubsistingandwait
tillthedateofdelivery,orhemaytreatthecontractasrescindedandsuefordamagesforthebreach.
5. Suit for interest: (1) Nothing in this Act shall a ect the right of the seller or the buyer to recover
interestorspecialdamages,inanycasewherebylawinterestorspecialdamagesmayberecoverable,
or to recover the money paid where the consideration for the payment of it has failed. (2) In the
absenceofacontracttothecontrary,thecourtmayawardinterestatsuchrateasitthinksfitonthe
amountofthepricetothebuyerinasuitbyhimfortherefundofthepriceinacaseofabreachofthe
contractonthepartofthesellerfromthedateonwhichthepaymentwasmade.
Q38. Explain the treatment of Revision in Tax to existing Contract of Sale.
Ans.
INCLUSION OF INCREASED OR DECREASED TAXES IN CONTRACT OF SALE (SECTION 64A)
Whereafteracontracthasbeenmadebutbeforeithasbeenperformed,taxrevisiontakesplace.Wheretax
isbeingimposed,increased,decreasedorremittedinrespectofanygoodswithoutanystipulationstothe
paymentoftax,thepartieswouldbecomeentitledtoreadjustthepriceofthegoodsaccordingly.
Followingtaxesareappliedonthesaleorpurchaseofgoods:
• Anydutyofcustomsorexciseongoods,
• Anytaxonthesaleorpurchaseofgoods
The buyer would have to pay the increased price where the tax increases and may derive the benefit of
reduconiftaxesarecurtailed.Thus,sellermayaddtheincreasedtaxesintheprice.Thee ectofprovision
can, however, is excluded by an agreement to the contrary. It is open to the parties to stipulate anything
regardtotaxation.

CLASS WORK

THEORETICAL QUESTIONS

1. Explain the provisions of law relating to unpaid seller’s ‘right of lien’ and distinguish it from the “right
ofstoppagethe goodsintransit”.
2. Whatdoyouunderstandbytheterm“unpaidseller”undertheSaleofGoodsAct,1930?Whencanan
unpaidsellerexercisethe rightofstoppage ofgoodsintransit?

‰
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 HOME WORK1

1. AagreestosellahorsetoBonaconditionthatBwillkeepitfor6daysonTrialBasisandhavetheoption
toreturnontheexpiryof6days,ifhedoesnotfinditsuitable.3daysafterenteringintocontract,Horse
diedwithoutanyfaultofAorB.Whethercontractwillbevalidorvoid?
Ans. Hint : YesContractisvoidasdestructionofgoodsbeforepassingproperty.
2. PagreestosellapplestoQatpricetobefixedbyR.Subsequently,Rrefusestovaluethegoodsand
fixtheprice.Whetheragreementbevalidorvoid?
WhatwillbeconsequencesifRwaswillingtovaluetheapplesbuthewaspreventedfromevaluating
bywrongfulactofP?
Ans. Hint : Voidaspricenotfixedincontractandpropertyisnotpassed
P willbeliablefordamages.
3. XsoldtoYcertainquantitiesof“foreignrefinedOil”warrantedequaltosample.Thesampleconsisted
of“foreignrefinedOilmixedwith HempOil”.Theoil wasmatchingwith qualityofsample butnot as
knowninmarkettobe“foreignrefinedOil”.CanYrejectgoods?
Ans. Hint : Yes.Goodsdonotmuchwithdescription.
4. KboughtaNecklessfromafamousJewellerLathighpricethinkingittobeofNaturalpearl.Infact,the
necklesswasofsyntheticpearl(ofwhichKwasunawarebutLwaswellaware).WhetherKcancancel
thecontract?
Ans. Hint : No.AsperCaveatEmptorrule.
5. Nsoldwholequantityofoilinhisgodown.Theoilistobeputintocasksbysellerandthentobetaken
awaybybuyer.Somecaskswerefilledinthepresenceofthebuyer,butbeforetheywereremovedor
anyothercanbefilled,thegodownwascaughtbyfireandwholequantityofoilwasdestroyed.Who
would beartheloss?
Ans. Hint : Partlyseller&Partlybuyer
6. XgivenaCartoY(hismercantileAgent)statingthatthecarshouldnotbesoldbelowRs.500000toany
one.Yagreedforthesame,butlateronhesoldthecartoZatRs.400000(whoboughtitingoodfaith)
andYabscondedwithmoney.WhetherXcanrecoverCarfromZ?
Ans. Hint : No.SalebyMercantileAgenttobuyeringoodfaithisvalid.
7. P sold certain goods to Qto be paid immediately.P sold the goods through railway sending Railway
receipttoQ.Q became Insolvent whilethegoods arein transit.He assigns the Railwayreceiptto R,
who does not know that Q is insolvent. P being Unpaid seller, want to exercise right of stoppage in
transit.AdvisewhetherPcanstopgoodsintransit?
WouldyouranswerchangeifRwasawareaboutQ’sinsolvencybeforeassignmentofrailwayreceipt?
Ans. Hint : No.SalebyQtoR(whoisingoodfaith)isvalid.
Yes.AsRisnotingoodfaith.Saleisnotvalid.
8. Amadeabidatauctionforoldcar.Butbeforefallofhammer,Awithdrewhisbid.Stilltheauctioneer
continuedwithbidandcompelledhimtobuygoods,astherewasapreconditioninauctionthat“bid
oncemadeshallnotbewithdrawn”.WhetherAcanbecompelledtobuygoods?
Ans. Hint : No.Asperrulesofauctionsalebidscanbewithdrawnbeforefallofhammer.

Chapter-2 : Sale of Goods Act, 1930 - 89 -

 HOME WORK2

1. Statewhetherthefollowingisa‘Sale’oran‘agreementtosell’:
(a) XagreestobuyfromYahaystackonY'sland,withthelibertytocometoY'slandtotakeitaway.
(b) Xagreestobuy1,000litresofcoconutoilfromY'scistern.Yhasmanycisternswithmorethan1,000
litres in them.
Ans : (a)SaleasYhasfullcontrolovergoods.(b)Agreementtosellasunascertainedgoods
2. AboughtamotorcarfromB.Heuseditfor3monthsandthereafterthecarwasdetectedtohavebeen
stolen.Awascompelledtoreturnittothetrueowner.CouldArecoverthesalepricefromB?
Ans : YesAsitisvoidcontract.[Notitletogoods]
3. MatCalcuttasoldtoN20bagsofwaste‘silk’thenontheirwayfromMurshidabadtoCalcutta.Butwhen
thebagsreachedN,hefoundthattheycontainedwastesilknodoubtbutnotofthequalityhehadin
view.WouldNbeentitledtorejectthegoods?
Ans : NoAsperCavetEmptor.
4. AcontractstosellJavaSugaraccordingtothesampleproducedbyhimonthedeliveryofthesampleto
B,thebuyer.IttranspiresthatthesugaragreeswithsamplebutisnotJavaSugar.WillBbeentitledto
any remedies?
Ans : Yesrejectgoodsduetobreachofconditionastodescription.
5. Xentersintoadruggist'sshopandaskedforahotwaterbottle.Heisshownabottlewhichtheproprietor
oftheshopsaywillnotstandboilingwaster,butitismeantforhotwater.
Xbuysthebottle,andonedaywhileusingit,itburstsandinjuresX.Itisprovedthatthebottlewasnot
fitforuseasahotwaterbottle.Isthesellerliabletodamagesforbreachofwarranty?
Ans : Yes  breach of merchantability condition.
6. There was a sale by sample on the 5th May, of two parcels of rice containing 500 and 100 bushels
respectively. When, on the12th May,thebuyer went toexamine the bulk, theparcelcontaining500
bushelswasshowntohimbutthesellerrefusedtoshowhimtheotherparcelwhichwasnotthenin
thegodown.Onthisaccountthebuyerrescindedthewholecontract.Couldhedoso?
Ans : YesAsitwassinglecontractofbothparcels.
7. XoffersYhisbuffalofor`1,200,thebuffalotobedeliveredtoYonastipulateddayandpricetobepaid
onanotherstatedday.Yacceptstheoffer.DoesthepropertyinthebuffalopasstoY?
Ans : YesUnconditionalcontractforSaleofGoods.
8. XcontractstosellastackofhaytoY,toweighanddeliveritat`100pertonne.Apartofitwasweighed
andtakenawaybutbeforeanythingmorecouldbedoneafloodcarriedawaytheremainder.Onwhom
willthelossasregardsthereminderfall?
Ans : ‘X’willbearlossAspropertyisnotpassedtoY.
9. Inthepursuanceofacontracttofill20bagsofsugaroutofalargequantity,thesellerfilledfourbags
which the buyer takes away. Subsequently, the seller filled 16 more bags, informed the buyer of this
andrequestedhimtotakethemaway.Thebuyerpromisedtodoso.Didthepropertyinthe16bagsof
sugarpasstothebuyer?
Ans : Yes deliverable goods&informedtobuyer.
10. Goodsdeliveredonsaleorreturnbasiswerepledgedbythedelivery.Couldtheoriginalownerrecovers
thegoodsfromthepledgee?
Ans : No Pledge impliesapproval of goods.

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11. A agrees topurchase balesof paperfromB at Madras.Thegoods are sent byrailway,delivery tobe
againstpaymentbyAthroughbank.Apaidtheamountandobtainedadeliveryorder.
But the goods had been destroyed by fire before he had paid the amount. Hasthe property in the
goodspassedtoA?
Ans : No  As goods destroyed before condition fulfilled.
12. Thedefendantpurchased 975balesofrice beingthewholecontentsofa“Gola”,paidearnestmoney
andtookpartdeliveryofrice.Therestwasafterwardsdestroyedbyfire.Wouldthedefendantbeliable
topaythebalanceofthepriceinrespectofthegoodsdestroyed?
Ans : YesAsPropertywaspassettobuyer.
13. Amanufacturingjewellerdeliverscertain articlesofjewellerytoB(whosebusinessistotravelabout
the country selling jewellery) upon the term that they should remain the property of A until sold or
paid for. B fraudulently pledges the jewellery with a pawnbroker and money lender. Is the pledge
valid?
Ans : YesPledgewasingoodfaith.
14. A,B,andCowncertaincattleincommon.AisleftbyBandCinpossessionofacowwhichhesellstoD.
Dpurchasesitbonafide.IsthepropertyinthecowtransferredtoD?
Ans : YesDboughtingoodfaith.
15. AsellstoBcertainspecificgoodswhicharelockedupingodown.AgivesBthekeyofthegodown.Does
theactionAconstitutedeliveryofthegoodstoB?
Ans : Yes  Symbolic delivery.
16. A sells50quintals of wheat toB.The wheat remains in A'swarehouse after the sale. B sellstoC 10
quintalsofwheat,andAatB'sdesiresendsthose10quintalsofwheattoC.Inthecircumstancescanit
beregardedasthedeliveryofthewholequantityofthewheat?
Ans : No.It’spartdelivery.
17. PagreestosellanddelivertoY300quintalsofrice,butonly200quintalsaredelivered.Yhastherice
weighedandacceptsthequintalssent.Yafterwardsobjectsthatthewholeofthe300quintalswasnot
deliveredandherefusestopayfor200quintals.CanYbecompelledtopaythepricefor200quintals?
Ans : YesAsheaccepted200Quintals.
18. Therewasasaleof25tonnesofclovesforOctober/Novembershipment.Thesellershipped20tonnes
inNovemberand5tonnesinDecember.Wouldthebuyerbeentitledtorejectthewhole25tonnes?
Ans : YesAsitispartdelivery.
19. There was a sale of 100 tonnes of paper to be shipped as early as possible by named ship or other
vessels. The named ship wasnotavailable andthe seller shipped50 tonnes on othership, informing
thebuyerthathehasdonesoandthathehaddrawnonhimforthepriceandproposingtoshipthe
remainderofthepaperlater.Thebuyerkeptsilentonthiscommunication.Theshipwaslost.Theseller
broughtanactionagainstthebuyerforthepriceof50tonnes.Wouldhesucceed?
Ans : YesAsnoobjectionbybuyerondeliveryofhalfgoods.
20. B(aLondonmerchant)placesanorderwithA(aBombaymerchant)for100balesofcotton.Bsendshis
shiptoBombayforcotton. Adelivers the cotton on boardthe ship,andtakesbilloflading fromthe
master,makingthecottondeliverabletoA'sorderorassigns.ThecottonarrivedatLondon,butbefore
coming into B's possession, B becomes insolvent. The cotton has not been paid for. Can A stop the
cotton?
Ans : YesAspossessionisnotpassedtobuyerandsellerisunpaidseller.

Chapter-2 : Sale of Goods Act, 1930 - 91 -

21. P, a manufacturer ofwatches delivers certain watches to Q upon the condition that the watches will
remain P's property until sold or paid for. Q is a famous dealer dealing in watches all over India. Q
frequentlypledgesthewatcheswithamoneylenderandobtains`50,000.Poncomingtoknowofthe
deal between Q and the moneylender, challenges the ‘pledge’ and wants the watches back, on the
groundthatQhadnoauthoritytopledgethewatches.Decide.
Ans : PwillnotsucceedPledgeisvalidaspledgeisingoodfaith.
22. Mr.S.K.agreedtopurchase50balesofcottonfromMr.R.K.fromhislargestockandsenthismantotake
the delivery. They could pack only 30 bales. Then there was accidental fire and the entire stock was
destroyedincluding30packedbales.Whowillbearthelossandtowhatextent?Explain.
Ans : R.K.bearlossupto20balesandS.K.bearlossupto30bales.
23. XpurchasedaVCRatapublicauction.NeithertheauctioneernorXknewatthattimethattheVCRwas
a stolen property.
(a) Hasthetrueowneranyclaimagainst(i)Xor(ii)theauctioneer?
Ans : OwnercanrecoverVCRbackfromX.
24. Mr.Samuelagreedtopurchase100balesofcottonfromMr.Varun,outofhislargestockandsenthis
mentotakedeliveryofthegoods.Theycouldpackonly60bales.Lateron,therewasanaccidentalfire
and the entire stock was destroyed including 60 bales that were already packed. Referring to the
provisionsoftheSaleofGoodsAct,1930explainastowhowillbearthelossandtowhatextent?
Ans : Samuellossupto60&Varunupto40.
25. ReferringtotheprovisionsoftheSaleofGoodsAct,1930,statethecircumstancesunderwhichwhen
goods are delivered to the buyer “on approval” or “on sale or return” or other similar terms, the
property therein passes to the buyer.
M/sPREETIownedamotorcarwhichshehandedovertoMr.JOSHIonsaleorreturnbasis.Afteraweek,
Mr.JOSHI pledgedthemotorcartoMr.GAJESH.Ms.PREETInowclaimsbackthemotorcarfromMr.
GAJESH. Will she succeed” Referring to the provisions of the Sale of Goods Act, 1930, decide and
examinewhatrecourseisavailabletoMs.PREETI. [RTP Nov.18]
Ans : NoAspledgeisvalidbyJoshi.
26. RamconsultsShyam,amotorcardealerforacarsuitablefortouringpurposestopromotethesaleof
hisproduct.Shyamsuggests‘Maruti’andRamaccordinglybuysitfromShyam.Thecarturnsouttobe
unfitfortouringpurposes.WhatremedyRamishavingnowundertheSaleofGoodsAct,1930?
[RTP Nov.18]
Ans : Ramcanrejectgoodsasbreachofconditionastofitness.
27. Differentiae between ‘Ascertained and Unascertained Goods with example.[Sugg.Nov18, 4 Marks]
28. Mr.GsoldsomegoodstoMr.Hforcertainpricebyissueofan invoice,butpaymentinrespectofthe
samewasnotreceivedonthatday!ThegoodswerepackedandlyinginthegodownofMr.G.Thegoods
wereinspectedbyH’sagentandwerefoundtobeinorder.Lateron,theduesofthegoodsweresettled
incash.Justafterreceivingcash,Mr.GaskedMr.Hthatgoodsshouldbetakenawayfromhisgodownto
enablehimtostoreothergoodspurchasedbyhim.Afteroneday,sinceMr.Hdidnottakedeliveryof
thegoods,Mr.G keptthegoods outofthegodown inanopen space.Due to rain,somegoodswere
damaged.
ReferringtotheprovisionsoftheSaleofGoodsAct,1930,analysetheabovesituationanddecidewho
will be held responsible for the above damage. Will your answer be different, if the dues were not
settledincashandarestillpending? [Sugg.Nov18, 6 Marks]

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29. WhatismeantbydeliveryofgoodsundertheSaleofGoodsAct,1930?Statevariousmodesofdelivery.
[Sugg.May18, 4 Marks]
30. What is appropriation of goods under the Sale of Goods Act, 1930? State the essentials regarding
appropriation of unascertained goods. [Sugg.May18, 6 Marks]

31. Mr.DsoldsomegoodstoMr.EforRs.5,00,000on15dayscredit.Mr.Ddeliveredthegoods.Onduedate
Mr.Erefusedtopayforit.StatethepositionandrightsofMr.DasperTheSaleofGoodsAct,1930.
[Sugg.May18, 6 Marks]
32. DiscussthevarioustypesofimpliedwarrantiesaspertheSalesofGoodsAct,1930?
[Sugg.May19, 4 Marks]
33. “Anonownercan convey bettertitletothebonafidepurchaserofgoods for value.”Discussthecases
whenapersonotherthantheownercantransfertitleingoodsasper theprovisionsoftheSalesof
GoodsAct,1930? [Sugg.May19, 6 Marks]
34. M/sWoodworth&Associates,afirmdealingwiththewholesaleandretailbuyingandsellingofvarious
kinds of wooden logs, customized as per the requirement of the customers. They dealt with Rose
wood,Mangowood,Teakwood,Burmawoodetc.
Mr.Das,acustomercametotheshopandaskedforwoodenlogsmeasuring4inchesbroadand8feet
long as required by the carpenter. Mr. Das specifically mentioned that he required the wood which
would bebest suited forthepurposeofmakingwoodendoorsandwindowframes.The Shopowner
agreedandarrangedthewoodenpiecescutintoasperthebuyersrequirements.
ThecarpentervisitedMr.Das’shousenextday,andhefoundthatthesellerhassuppliedMangoTree
woodwhichwouldmostunsuitableforthepurpose.The:carpenteraskedMr.Dastoreturnthewooden
logsasitwouldnotmeethisrequirements.
The Shop owner refused to return the wooden logs on the plea that logs were cut to specific
requirementsofMr.Dasandhencecouldnotberesold.
(i) Explainthedutyofthebuyeraswellastheselleraccordingtothedoctrineof“CaveatEmptor”.
(ii) Whether Mr. Das would be able to get the money back or the right kind of wood as required
serving his purpose? [Sugg.May19, 6 Marks]
35. Statethevariousessentialelementsinvolvedinthesaleofunascertainedgoodsanditsappropriation
aspertheSaleofGoodsAct1930. [Sugg.Nov19, 4 Marks]
36. WhataretherightsofanunpaidselleragainstgoodsundertheSaleofGoodsAct,1930?
[Sugg.Nov19, 6 Marks]
37. Mrs.Geetawenttothelocalriceandwheatwholesaleshopandaskedfor100kgsofBasmatirice.The
ShopkeeperquotedthepriceofthesameasRs.125perkgtowhichaheagreed.Mrs.Geetainsisted
that she wouldlike tosee the sample of whatwill beprovided toherbythe shopkeeperbefore she
agreeduponsuchpurchase.
Theshopkeepershowedherabowlofriceassample.Thesampleexactlycorrespondedtotheentire
lot.
The buyer examined thesample casually without noticing thefact that even though the sample was
thatctfBasmatiRicebutitcontainedamixoflongandshortgrains.
Thecookonopeningthebegscomplainedthatthedishifpreparedwiththericewouldnottastethe
sameasthequalityofricewasnotasperrequirementofthedish.
NowMrs.Geetawantstofileasuitoffraudagainsttheselleralleginghimofsellingmixofgoodand
cheap quality rice. Will she be successful?
ExplainthebasiclawonsalebysampleunderSaleofGoodsAct1930?
Chapter-2 : Sale of Goods Act, 1930 - 93 -
 Decidethefateofthecaseandoptionsopentothebuyerforgrievanceredressalaspertheprovisions
ofSaleofGoodsAct1930?
WhatwouldbeyouranswerincaseMrs.Geetaspecifiedherexactrequirementastolengthofrice?
[Sugg.Nov19, 6 Marks]
38. ExplainthedifferencebetweenSaleandAgreementtosellundertheSaleofGoodsAct,1930.
[MTP April19, 4 Marks]
39. Whataretheimpliedconditionsinacontractof‘Salebysample’undertheSaleofGoodsAct,1930?
State alsothe implied warrantiesoperatives under thesaid Act. [MTP April19, 6 Marks]
40. Mr.DsoldsomegoodstoMr.EforRs.5,00,000on15dayscredit.Mr.Ddeliveredthegoods.Onduedate
Mr.Erefusedtopayforit.StatethepositionandrightsofMr.DaspertheSaleofGoodsAct,1930.
[MTP April19, 6 Marks]
41. Explaintheterm“Deliveryanditsforms”undertheSaleofGoodsAct,1930. [MTP MARCH19, 4 Marks]
42. Whatdoyouunderstandbytheterm“unpaidseller”undertheSaleofGoodsAct,1930?Whencanan
unpaidsellerexercisethe rightofstoppage ofgoodsintransit? [MTP MARCH19, 6 Marks]
43. Mr.Samuelagreedtopurchase100balesofcottonfromMr.Varun,outofhislargestockandsenthis
mentotakedeliveryofthegoods.Theycouldpackonly60bales.Lateron,therewasanaccidentalfire
andtheentirestockwasdestroyedincluding60balesthatwerealreadypacked.
ReferringtotheprovisionsoftheSaleofGoodsAct,1930explainastowhowillbearthelossandto
what extent? [MTP MARCH19, 6 Marks]
44. WhatismeantbydeliveryofgoodsundertheSaleofGoodsAct,1930?Statevariousmodesofdelivery.
[MTP OCT19, 4 Marks]
45. Whatdoyouunderstandbytheterm“unpaidseller”undertheSaleofGoodsAct,1930?Whencanan
unpaidsellerexercisethe rightofstoppage ofgoodsintransit? [MTP OCT19, 6 Marks]
46. Mr.GsoldsomegoodstoMr.Hforcertainpricebyissueofaninvoice,butpaymentinrespectofthe
samewasnotreceivedonthatday.ThegoodswerepackedandlyinginthegodownofMr.G.
ThegoodswereinspectedbyH’sagentandwerefoundtobeinorder.Lateron,theduesofthegoods
weresettledincash.Justafterreceivingcash,Mr.GaskedMr.Hthatgoodsshouldbetakenawayfrom
hisgodowntoenablehimtostoreothergoodspurchased byhim.Afterone day,since Mr. Hdidnot
takedeliveryofthegoods,Mr.Gkeptthegoodsoutofthegodowninanopenspace.Duetorain,some
goods were damaged.
ReferringtotheprovisionsoftheSaleofGoodsAct,1930,analysetheabovesituationanddecidewho
will be held responsible for the above damage. Will your answer be different, if the dues were  not
settledincashand arestill pending? [MTP OCT19, 6 Marks]
47. ExplainthedifferencebetweenSaleandAgreementtosellundertheSaleofGoodsAct,1930.
[MTP MARCH18, 4 Marks]
48. Whataretheimpliedconditionsinacontractof‘Salebysample’undertheSaleofGoodsAct,1930?
State alsothe implied warrantiesoperatives under thesaid Act. [MTP MARCH18, 6 Marks]
49. Mr.Samuelagreedtopurchase100balesofcottonfromMr.Varun,outofhislargestockandsenthis
mentotakedeliveryofthegoods.Theycouldpackonly60bales.Lateron,therewasanaccidentalfire
and the entire stock was destroyed including 60 bales that were already packed. Referring to the
provisionsoftheSaleofGoodsAct,1930explainastowhowillbearthelossandtowhatextent?
[MTP MARCH18, 6 Marks]

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50. StatebrieflytheessentialelementofacontractofsaleundertheSaleofGoodsAct,1930.
[RTPMay20]
51. WhatisanImpliedWarrantyandstatethevarioustypesofImpliedWarranties. [RTPMay20]
52. “Nemo Dat Quod Non Habet” – “None can give or transfer goods what he does not himself own.”
ExplaintheruleandstatethecasesinwhichtheruledoesnotapplyundertheprovisionsoftheSaleof
GoodsAct,1930. [RTPMay20]
53. Whataretherightsofbuyeragainsttheseller,ifthesellercommitsabreachofcontractundertheSale
ofGoodsAct,1930? [RTPMay20]
54. Mr.S agreed to purchase100 bales of cotton from V,out of hislargestock andsent hismento take
delivery of the goods. They could packonly 60 bales. Later on, there was an accidental fire and the
entirestockwasdestroyedincluding60balesthatwerealreadypacked.Referringtotheprovisionsof
theSaleofGoodsAct,1930explainastowhowillbearthelossandtowhatextent? [RTPMay20]
55. Mr.AmitwasshoppinginaselfserviceSupermarket.Hepickedupabottleofcolddrinkfromashelf.
Whilehewasexaminingthebottle,itexplodedinhishandandinjuredhim.Hefilesasuitfordamages
againsttheownerofthemarketonthegroundofbreachofcondition.DecideundertheSaleofGoods
Act,1930,whetherMr.Amitwouldsucceedinhisclaim? [RTPMay20]

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Chapter-2 : Sale of Goods Act, 1930 - 95 -

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 CHAPTER  3
THE INDIAN PARTNERSHIP ACT, 1932

INTRODUCTION
THE ACT COVERS MAINLY FOLLOWING :
 TheActgivesguidanceaboutrelationshipof partnersaswellaswithoutsiders.
 Concept of partnerships and its essentials.
 ‘Principal  agent relationship’ among the partners.
 Points of difference betweenpartnership and other various forms of organization.
 Itisverypopularfromofbusinessorganisation.
 Be familiar with the legal provisions regulating relation of partners’ interest as well asrelations with
the third parties.
 Thescopeofimpliedauthorityofapartnertobindthepartnershipbyhisacts.
 Varioussituationsinwhichtheconstitutionofafirmmaychangeanditseffectontherightsandduties
of the partners.
 How the share in a partnership is transferred and what shall be the rights and obligations of such
transferee.
 Modeofgettingafirmregisteredwiththeauthorities.
 The effect of registration of a firm upon the rights of partners’ interse and the rights of the third
parties.
 Effectofnonregistrationonrightsofpartnersandthethirdparties.
 Various circumstances when a firm is dissolved.
 Theconsequences andthe effectsofthe dissolution upon rights and liabilitiesof variousparties.

UNIT 1: GENERAL NATURE OF A PARTNERSHIP

Q1 Define partnership, partner, firm and firm name as well as indicate essentials of partnership?
Ans.
‘Partnership’ istherelationbetweenpersonswhohaveagreedtosharetheprofitsofabusinesscarriedon
byalloranyofthemactingforall.Personswhohaveenteredintopartnershipwithoneanotherarecalled
individually ‘partners’ and collectively ‘a firm’, and the name under which their business is carried on is
calledthe‘firm name’.

Chapter-3 : The Indian Partnership Act, 1932 - 99 -

 ELEMENTS OF PARTNERSHIP
1. ASSOCIATION OF TWO OR MORE PERSONS:Partnershipisanassociationof2ormorepersons.Again,
onlypersonsrecognizedbylawcanenterintoanagreementofpartnership.Therefore,a rm,since
itisnotapersonrecognizedintheeyesoflawcannotbeapartner.Again,aminorcannotbeapartner
inafirm,butwiththeconsentofallthepartners,maybeadmiedtothebene tsofpartnership.
ThepartnershipActissilentaboutthemaximumnumberofpartnersbutsection464oftheCompanies
Act,2013hasnowputalimitof50partnersinanyassociaon/partnership rm.
2. AGREEMENT:Itmaybeobservedthatpartnershipmustbetheresultofanagreementbetweentwoor
morepersons.Theremustbe anagreemententeredintobyall thepersonsconcerned.Thiselement
relatestovoluntarycontractualnatureofpartnership.Thus,thenatureofthepartnershipisvoluntary
and contractual.
An agreement from which relationship of Partnership arises may be express. It may also be implied
fromtheactdonebypartnersandfromaconsistentcourseofconductbeingfollowed,showingmutual
understandingbetweenthem.Itmaybeoral orinwriting.
3. BUSINESS:Inthiscontext,wewillconsidertwopropositions.First,theremustexistabusiness.Forthe
purpose,theterm‘business’includeseverytrade,occupationandprofession.Theexistenceofbusiness
is essential. Secondly, the motive of the business is the “acquisition of gains” which leads to the
formation of partnership.
4. AGREEMENT TO SHARE PROFITS:Thesharingofpro tsisanessenalfeatureofpartnership.Butan
agreementtosharelossesisnotanessentialelement.Itisopentooneormorepartnerstoagreeto
share all the losses.
5. BUSINESS CARRIED ON BY ALL OR ANY OF THEM ACTING FOR ALL :Thebusinessmustbecarriedonbyall
the partners or by anyone or more of the partners acting for all. This is the cardinal principle of the
partnership Law. In other words, there should be a binding contract of mutual agency between the
partners.
Anactofonepartnerinthecourseofthebusinessofthe rmisinfact anact ofallpartners.Each
partnercarryingonthebusinessistheprincipalaswellastheagentforalltheotherpartners.
Q2 What are the true tests of partnership ?
Ans.
1. Agreement: Partnershipiscreatedbyagreementandbystatus(Section5).Therelationofpartnership
arisesfromcontractandnotfromstatus;
2. Sharing of Profit: Thesharingofprofitsorofgrossreturnsarisingfrompropertybypersonsholdinga
jointorcommoninterestinthatpropertydoesnotofitselfmakesuchpersonspartners.
Asdiscussedearlier,sharingofprofitisanessentialelementtoconstituteapartnership.But,itisonly
aprima facie evidenceandnotconclusiveevidence,inthatregard.
Butthetaskbecomesdifficultwheneitherthereisnospecificagreementortheagreementissuchas
does not specifically speak of partnership. In such a case for testing the existence or otherwise of
partnershiprelation,Section6hastobereferred.AccordingtoSection6,regardmustbehadtothereal
relation between the partiesas shown byallrelevant factstakentogether.
3. Agency: Existence of Mutual Agency which is the cardinal principle of partnership law, is very much
helpfulinreachingaconclusioninthisregard.Eachpartnercarryingonthebusinessistheprincipalas
well as an agent of other partners. So, the act ofone partner done on behalf of firm, binds all the
partners.

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Q3 Indicate points of differences between partnership and joint stock company?
Ans.
Basis Partnership Joint Stock Company
Legal status Afirmisnotlegalentityi.e.,ithasno Acompanyisaseparatelegalentity
legalpersonality distinct from the distinct from its members
personalities of its constituent members.
Agency Inafirm,everypartnerisanagentofthe Inacompany,amemberisnotanagent
otherpartners,aswellasofthe rm. oftheothermembersorofthecompany,
hisactionsdonotbindeither.
Distribution of Theprotsofthe rmmustbedistributed Thereisnosuchcompulsiontodistribute
profits amongthepartnersaccordingtothe itsprofitsamongitsmembers.
terms of the partnership deed.
Extent of liability Inapartnership,theliabilityofthe Inacompanylimitedbyshares,the
partners is unlimited. liabilityof a shareholder islimitedtothe
amount,ifany,unpaidonhisshares,but
inthecaseofaguaranteecompany,the
liabilityislimitedtotheamount forwhich
hehasagreedtobeliable.
Property Thefirm’spropertyisthatwhichis Inacompany,itspropertyisseparate
the“jointestate”ofallthepartnersas fromthatofitsmembers.
distinguished from the ‘separate’ estate
ofanyofthemanditdoesnotbelongto
abodydistinctinlawfromitsmembers.
Transfer of shares Ashareinapartnershipcannotbe Inacompanyashareholdermaytransfer
transferredwithouttheconsentofallthe his shares,subject tothe provisions
partners. containedinitsArticles.Inthecaseof
public limited companies whose shares
arequotedonthestockexchange,the
transfer is usually unrestricted.
Management Intheabsenceofanexpressagreementto Membersofacompanyarenotentitled
thecontrary, allthe partners are entitled totakepartinthemanagementunless
toparticipatein the management. theyareappointedasdirectors,inwhich
casetheymayparticipate.
Registration Registrationisnotcompulsoryinthe Acompanycannotcomeintoexistence
case of partnership. unless itis registered under the
CompaniesAct,2013.
Winding up Apartnership rmcanbedissolvedat Acompany, beingalegalperson iseither
anytimeifallthepartnersagree. windupbytheNationalCompanyLaw
Tribunaloritsnameisstruckofbythe
Registrar of Companies.

Chapter-3 : The Indian Partnership Act, 1932 - 101 -

 Number of Accordingtosection464ofthe Aprivatecompanymayhaveasmanyas
membership CompaniesAct,2013,thenumberof 200membersbutnotlessthantwoand
partnersinanyassociationshallnot apubliccompanymayhaveanynumber
exceed100. ofmembersbutnotlessthanseven.A
However, the Rule given under the privateCompanycanalsobeformed
Companies (Miscellaneous) Rules, 2014 byonepersonknownasoneperson
restrictthepresentlimitto50. Company.
Duration of Unlessthereisacontracttothecontrary, Acompanyenjoysaperpetual
existence death,retirement orinsolvencyofa succession.
partner resultsin the dissolutionof the
firm.
Q4 Indicate difference between partnership and club?
Ans.
Basis of Difference Partnership Club
Definition Itisanassociationofpersonsformedfor Aclubisanassociationofpersons
earningprofitsfrom abusinesscarried formedwiththeobjectnotofearning
onbyalloranyoneofthemactingfor profit, but of promotingsome beneficial
all. purposessuch asimprovement of
healthorprovidingrecreationforthe
members, etc.
Relationship Personsforming apartnership arecalled Personsformingaclubarecalled
partnersandapartnerisanagentfor members.Amemberofaclubisnotthe
other partners. agent ofothermembers.
Interest in the Partnerhasinterestinthepropertyof Amemberofaclubhasnointerestin
property the firm. thepropertyoftheclub.
Dissolution Achangeinthepartnersofthefirm Achangeinthemembershipofaclub
affect its existence. does not affect its existence.
Q5 Indicate difference between partnership and Huf ?
Ans.
Basis of difference Partnership Joint Hindu family
Modeofcreation Partnership iscreatednecessarily byan Therightinthejointfamilyiscreatedby
agreement. statusmeansitscreationbybirthinthe
family.
Deathofa Deathofapartnerordinarilyleadsto ThedeathofamemberintheHindu
member the dissolution of partnership. undividedfamily doesnot give riseto
dissolution of the family business.
Management All the partners are equallyentitled to Therightofmanagementofjointfamily
take part in thepartnership business. businessgenerallyvests in the Karta,
thegoverning male member or female
member of the family.

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 Authority to bind Everypartnercan,byhisact,bindthe TheKartaorthemanager,hasthe
firm. authoritytocontractforthefamily
businessandtheothermembersinthe
family.
Liability Inapartnership,theliabilityofapartner Ina Hindu undivided family,only the
is unlimited. liability ofthe Kartais unlimited,and the
othercoparcenerareliableonlytothe
extentoftheirshareinthepro tsofthe
family business.
Calling for Apartnercanbringasuitagainstthe On theseparationof thejoint family,
accounts firmforaccounts,providedhealso amemberisnotentitledtoaskfor
on closure seeks the dissolution of the firm. account of thefamily business.
Governing Law ApartnershipisgovernedbytheIndian AJoint Hindu Family businessis
PartnershipAct,1932. governedbytheHinduLaw.
Minor’s capacity Inapartnership,aminorcannotbecome In Hindu undivided family business,
apartner,thoughhecanbeadmittedto aminorbecomesamemberofthe
the bene tsof partnership, only with ancestral business by the incidence
theconsentofallthepartners. ofbirth.Hedoesnothavetowaitfor
attaining majority.
Continuity Afirmsubjecttoacontractbetween AJointHindufamilyhasthecontinuity
thepartnersgetsdissolvedbydeath tillitisdivided.ThestatusofJointHindu
orinsolvencyofapartner. familyisnottherebyaffectedbythe
deathofamember.
Number of IncaseofPartnershipnumberof MembersofHUFwhocarryona
Members membersshouldnotexceed50. business may be unlimited in number.
Shareinthe Inapartnershipeachpartnerhasa InaHUF,nocoparcenershasadefinite
business definedsharebyvirtueofan share.Hisinterestisa uctuangone.It
agreement between the partners. iscapableofbeingenlargedbydeaths
in the familydiminishedbybirthsin the
family.
Q6 Indicate points of difference between partnership and coownership ?
Ans.
Basis of difference Partnership Coownership
Formation Partnershipalwaysarisesoutofa Coownership may arise either from
contract, express or implied. agreementorbytheoperationoflaw,
suchasbyinheritance.

Chapter-3 : The Indian Partnership Act, 1932 - 103 -

 Implied agency Apartneristheagentoftheother Acoownerisnottheagentofotherco
partners. owners.
Nature of interest There iscommunity ofinterestwhich Coownership does not necessarily
meansthatprofitsandlossesmust involve sharing of profits and losses.
havetobeshared.
Transfer Ashareinthepartnershipistransferred Acoownermaytransferhisinterest
of interest onlybytheconsentofotherpartners. orrightsinthepropertywithoutthe
consent of other coowners.
Q7 Indicate points of difference between partnership and association ?
Ans.
Basis of difference Partnership Association
Meaning Partnership means and involves setting Association evolveoutofsocial cause
uprelationofagencybetweentwoor wherethere isnonecessarilymotiveto
morepersonswhohaveenteredintoa earnandshareprofits.Theintentionis
businessforgains, with theintention to nottoenterinabusinessforgains.
sharetheprofitsofsuchabusiness.
Examples Partnershiptorunabusinessandearn Membersofcharitablesocietyor
profit thereon. religious association or an improvement
schemeorbuildingcorporationora
mutualinsurancesocietyoratrade
protection association.
Q8 Write a note on different kind of partnership ?
Ans.
1. Partnership at will according to Section 7 of the Act, partnership at will is a partnership when:
1. nofixedperiodhasbeenagreeduponforthedurationofthepartnership;and
2. thereisnoprovisionmadeastothedeterminationofthepartnership.
Whereapartnershipenteredintoforafixedtermiscontinuedaftertheexpiryofsuchterm,itistobe
treatedashavingbecomeapartnershipatwill.
A partnership at will may be dissolved by any partner by giving notice in writing to all the other
partnersofhisintention todissolvethe same.
2. Partnership for a xed period: Whereaprovisionismadebyacontractforthedurationofthepartnership,
the partnership is called ‘partnership for a xed period’. It is a partnership created for a particular
periodoftime.Suchapartnershipcomestoanendontheexpiryofthefixedperiod.
3. Particular partnership: A partnership may be organized for the prosecution of a single adventure as
well as for the conduct of a continuous business. Where a person becomes a partner with another
person in any particular adventure or undertaking the partnership is called ‘particular partnership’.
Apartnership,constitutedforasingleadventureorundertakingis,subjecttoanyagreement,dissolved
bythecompletionoftheadventureorundertaking.
4. General partnership:Whereapartnershipisconstitutedwithrespecttothebusinessingeneral,it is
called a general partnership. A general partnership is different from a particular partnership. In the
caseofaparticularpartnershiptheliabilityofthepartnersextendsonlytothatparticularadventureor
undertaking,butitisnotsointhecaseofgeneralpartnership.
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Q9 Write a note on partnership deed and its likely content ?
Ans. Partnershipisthe resultofanagreement.Noparticularformalitiesarerequiredfor anagreement of
partnership. It may be in writing or formed verbally. But it is desirable to have the partnership agreement
inwritingtoavoidfuturedisputes.Thedocumentinwritingcontainingthevarioustermsandconditions
astotherelationshipofthepartnerstoeachotheriscalledthe‘partnershipdeed’.Itshouldbedrafted
withcareandbestampedaccordingtotheprovisionsoftheStampAct,1899.Wherethepartnership
comprises immovable property, the instrument of partnership must be in writing, stamped and
registered under the Registration Act.
Partnershipdeed may contain the following information:
1. Nameofthepartnershipform.
2. Namesofallthepartners.
3. Natureandplaceofthebusinessofthefirm.
4. Date of commencement of partnership.
5. Duration ofthepartnershipfirm.
6. Capital contribution of each partner.
7. ProfitSharingratioofthepartners.
8. Admission and Retirement of a partner.
9. RatesofinterestonCapital,Drawingsandloans.
10. Provisionsforsettlementofaccountsinthecaseofdissolutionofthefirm.
11. Provisions for Salaries or commissions,payable tothe partners, if any.
12. Provisionsforexpulsionofapartnerincaseofgrossbreachofdutyorfraud.
Q10 Write a note on types of partners?
Ans.
(a) Active or Actual or Ostensible partner: Heactsasanagentofotherpartnersforallactsdoneinthe
ordinary course of business. In the event of his retirement, he must give a public notice in order to
absolve himself of liabilities for acts of other partnersdone after his retirement.
(b) Sleeping or Dormant Partner: They arecalledas‘sleeping’or‘dormant’ partners. They share profits
andlossesandareliabletothethirdpartiesforallactsofthefirm.Theyare,howevernotrequiredto
givepublicnoticeoftheir retirementfromthefirm.
(c) Nominal Partner: A person who lends hisname to the firm, without having any real interest in it, is
calledanominalpartner.Heisnotentitledtosharetheprofitsofthefirm.Neitherheinvestinthefirm
nortakespartintheconductofthebusiness.Heis,howeverliabletothirdpartiesforallactsofthe
firm.
Partner in profits only: Apartnerwhoisentitledtosharetheprofitsonlywithoutbeingliableforthe
losses is known as the partner for profits only and also liable to the third parties for all acts of the
profits only.
(d) Incoming partners: A person who is admitted as a partners into an already existing firm with the
consentofalltheexistingpartnersiscalledas“incomingpartner”.Suchapartnerisnotliableforany
actofthefirmdonebeforehisadmissionasapartner.
(e) Outgoing partner: Apartnerwholeavesafirminwhichtherestofthepartnerscontinuetocarryon
businessiscalledaretiringoroutgoingpartner.Suchapartnerremainsliabletothirdpartiesforallacts
ofthefirmuntilpublicnotice isgivenofhisretirement.

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 (f) Partner by holding out : Partnershipbyholdingoutisalsoknownaspartnershipbyestoppel.Wherea
man holds himself out as a partner, or allows others to do it, he is then stopped from denying the
characterhehasassumedanduponthefaithofwhichcreditorsmaybepresumedtohaveacted.
Apersonmayhimself,byhiswordsorconducthaveinducedotherstobelievethatheisapartnerorhe
mayhaveallowedotherstorepresenthimasapartner.Theresultinboththecasesisidentical.
Itisonlythepersontowhomtherepresentationhasbeenmadeandwhohasactedthereonthathas
right to enforce liability arising out of ‘holding out’.
Youmustalsonotethatforthepurposeof xingliabilityonapersonwhohas,byrepresentaon,led
anothertoact,itisnotnecessarytoshowthathewasactuatedbyafraudulentintention.
TherulegiveninSection28isalsoapplicabletoaformerpartnerwhohasretiredfromthefirmwithout
giving proper public notice of his retirement. In such cases a person who, even subsequent to the
rerement, give credit to the rm on the belief that he was a partner, will be entled to hold him
liable.

CLASS WORK

THEORETICAL QUESTIONS

1. Explain the provisions of the Indian Partnership Act, 1932 relating to the creation of Partnership by
holding out.
2. Whatisthetruetestofpartnership?
3.  Enumerate the differences between Partnership and Joint Stock Company.

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 UNIT 2: RELATIONS OF PARTNERS

Q11 Write a note on relation of partners to one another ?

Ans.
(a) GENERAL DUTIES OF PARTNERS : Partnersareboundtocarryonthebusinessofthefirmtothegreatest
commonadvantage,tobejustandfaithfultoeachother,andtorendertrueaccountsandfullinformation
ofallthingsaffectingthefirmtoanypartnerorhislegalrepresentative.
(b) DUTY TO INDEMNIFY FOR LOSS CAUSED BY FRAUD : Everypartnershallindemnifythefirmforanyloss
causedtoitbyhisfraudintheconductofthebusinessofthefirm.
(c) DETERMINATION OF RIGHTS AND DUTIES OF PARTNERS BY CONTRACT BETWEEN THE PARTNERS :
(1) SubjecttotheprovisionsofthisAct,themutualrightsanddutiesofthepartnersofafirmmaybe
determined by contract between the partners, and such contract may be express or may be
impliedbyacourseofdealing.
Suchcontractmaybevariedbyconsentofallthepartners,andsuchconsentmaybeexpressor
maybeimpliedbyacourseofdealing.
(2) Agreements in restraint of trade Notwithstandinganythingcontainedinsection27oftheIndian
ContractAct,1872,suchcontractsmayprovidethatapartnershallnotcarryonanybusinessother
thanthatofthefirmwhileheisapartner.
(d) The conduct to Business
(i) Right to take part in the conduct of the Business : Everypartnerhastherighttotakepartinthe
businessofthefirm.Thisisbecausepartnershipbusinessisabusinessofthepartnersandtheir
management powers are generally coextensive.
Example: Nowsuppose thismanagement poweroftheparticularpartner isinterferedwithand
he has been wrongfully precluded from participating therein. Can the Court interfere in these
circumstances? Theanswer is in the affirmative. The Courtcan, and will, byinjunction, restrain
other partners from doing so. It may be noted in this connection that a partner who has been
wrongfully deprived of the right of participation in the management has also other remedies,
e.g., asuit for dissolution,asuit foraccountswithoutseekingdissolution,etc.
The above mentioned provisions of law will be applicable only if there is no contract to the
contrary between the partners. It is quite common to find a term in partnership agreements,
whichgivesonlylimitedpowerofmanagementtoapartneroratermthatthemanagementofthe
partnershipwillremainwithoneormoreofthepartnerstotheexclusionofothers.Insuchacase,
the Court will normally be unwilling to interpose with the management with such partner or
partners,unlessitisclearlymadeoutthatsomethingwasdoneillegallyorinbreachofthetrust
reposedinsuch partners.
(ii) Right to be consulted : Where any difference arises between the partners with regard to the
business of the firm, it shall be determined by the views of the majority of them, and every
partnershallhavetherighttoexpresshisopinionbeforethematterisdecided.Butnochangein
thenatureofthebusinessofthefirmcanbemadewithouttheconsentofallthepartners.This
meansthatinroutinematters,theopinionofthemajorityofthepartnerswillprevail.Ofcourse,
themajoritymustactingoodfaithandeverypartnermustbeconsultedasfaraspracticable.
Itmaybementionedthattheaforesaidmajorityrulewillnotapplywherethereisachangeinthe
natureofthefirmitself.Insuchacase,theunanimousconsentofthepartnersisneeded.
(iii) Right of access to books : Everypartnerwhetheractiveorsleepingisentitledtohaveaccessto
anyofthebooksofthefirmandtoinspectandtakeoutofcopythereof.Therightmust,however,
be exercised bona fide.
Chapter-3 : The Indian Partnership Act, 1932 - 109 -
 (e) Mutual rights and liabilities
(i) Right to remuneration : Nopartnerisentitledtoreceiveanyremunerationinadditiontohisshare
in the profitsofthe firmfor takingpart in the businessofthefirm.Butthisrule can always be
varied by an express agreement, or by a course of dealings, in which event the partner will be
entitledtoremuneration.Thus,apartnercanclaimremunerationevenintheabsenceofacontract,
whensuchremunerationispayableunderthecontinuedusageofthefirm.Inotherwords,where
itis customarytopayremunerationtoapartner forconductingthebusinessofthefirm hecan
claimitevenintheabsenceofacontractforthepaymentofthesame.
(ii) Right to share Profits : Partnersareentitledtoshareequallyintheprofitsearnedandsocontribute
equallytothelossessustainedbythefirm.Theamountofapartner’ssharemustbeascertained
byenquiringwhetherthereisanyagreementinthatbehalfbetweenthepartners.Ifthereisno
agreementthenyoushouldmakeapresumptionofequalityandtheburdenofprovingthatthe
sharesareunequal, willlieon the party allegingthesame.
Thereisnoconnectionbetweentheproportioninwhichthepartnersshallsharetheprofitsand
theproportioninwhichtheyhavecontributedtowardsthecapitalofthefirm.
(iii) Interest on Capital : Thefollowingelementsmustbe therebeforeapartnercanbeentitled to
interestonmoneysbroughtbyhiminthepartnershipbusiness:(i)anexpressagreementtothat
effect, or practice of the particular partnership or (ii) any trade custom to that effect; or (iii) a
statutory provisionwhichentitles him tosuch interest.
(iv) Interest on advances : Supposeapartnermakesanadvancetothefirminadditiontotheamount
ofcapitaltobecontributedbyhim,insuchacase,thepartnerisentitledtoclaiminterestthereon
@6%perannum.Whileinterestoncapitalaccountceasestorunondissolution,theintereston
advanceskeeprunningevenafterdissolutionanduptothedateofpayment.
(v) Right to be indemnified : Every partner has the right to be indemnified by the firm in respect of
paymentsmadeandliabilitiesincurred byhim inthe ordinaryandproper conductofthebusiness of
thefirmaswellasintheperformanceofanactinanemergencyforprotectingthefirmfromanyloss,
ifthepayments,liabilityandactaresuchasaprudentmanwouldmake,incurorperforminhisown
case, under similar circumstances.
(vi) Right to indemnify the firm : A partner must indemnify the firm for any loss caused to it by wilful
neglectintheconductofthebusinessofthefirm.
Q12 Write a note on Partnership property ?
Ans. The expression ‘property ofthe firm’, also referred to as ‘partnership property’, ‘partnership assets’,
‘joint stock’, ‘common stock’ or ‘joint estate’, denotes all property, rights and interests to which the
firm, that is, all partners collectively, maybe entitled. Theproperty whichis deemedas belonging to
the firm, in the absence of any agreement between the partners showing contrary intention, is
comprised of the following items:
(i) all property, rights and interests which partners may have brought into the common stock as their
contribution to the common business;
(ii) alltheproperty,rightsandinterestacquiredorpurchasedbyorforthefirm,orforthepurposesandin
thecourseofthebusinessofthefirm;and
(iii) Goodwill of the business.
The determination of the question whether a particular property is or is not ‘property’ of the firm
ultimately dependson thereal intentionor agreementof the partners.Thus,themere fact that the
propertyofapartnerisbeingusedforthepurposesofthefirmshallnotbyitselfmakeitpartnership
property, unless it is intended to be treated as such. Partners may, by an agreement at any time,
convertthepropertyofanypartnerorpartners(andsuchconversion,ifmadeingoodfaith,wouldbe
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 effectualbetweenthepartnersandagainstthecreditorsofthefirm)ortheseparatepropertyofany
partner into a partnership property.
Property of a partner: Wherethepropertyisexclusivelybelongingtoaperson,itdoesnotbecomea
propertyofthepartnershipmerelybecauseitisusedforthebusinessofthepartnership,suchproperty
willbecomepropertyof thepartnership ifthere isanagreement.
APPLICATION OF THE PROPERTY OF THE FIRM : Subjecttocontractbetweenthepartners,theproperty
ofthefirmshallbeheldandusedbythepartnersexclusivelyforthepurposesofthebusiness.
Q13 What if a partner make personal profit ?
Ans. Subjecttocontractbetweenthe partners,
(a) If a partner derives any profit for himself from any transaction of the firm, or from the use of the
propertyorbusinessconnectionofthefirmorthefirmname,heshallaccountforthatprofitandpayit
tothefirm;
(b) Ifapartnercarriesonanybusinessofthesamenatureasandcompetingwiththatofthefirm,heshall
accountforandpaytothefirmallprofitsmadebyhiminthatbusiness.
Q14 What are the rights and duties of partner after changes in firm. ?
Ans. Beforegoingintorightsandduties,weshouldfirstknowhowachangemaytakeplaceintheconstitution
ofthefirm.Itmayoccurinoneofthefourways,namely,
 Whereanewpartnerorpartnerscomein
 Wheresomepartnerorpartnersgoout,i.e.,bydeathor
retirement
 Where the partnership concerned carrieson business
otherthanthebusinessforwhich itwasoriginally formed
 Wherethepartnershipbusinessis carriedonafterthe
expiryofthetermxedforthepurpose.
Subject to contract between the partners
(a) after a change in the firm: Whereachangeoccursintheconstitutionofafirm,themutualrightsand
dutiesofthepartnersinthereconstitutedfirmremainthesameastheywereimmediatelybeforethe
change,asfarasmaybe;
(b) after the expiry of the term of the firm: Whereafirmconstitutedforafixedtermcontinuestocarryon
businessaftertheexpiryofthatterm,themutualrightsanddutiesofthepartnersremainthesameas
theywerebeforetheexpiry,sofarastheymaybeconsistentwiththeincidentsofpartnershipatwill;
and
(c) where additional undertakings are carried out: where a firm constituted to carry out one or more
adventures or undertakings carries out other adventures or undertakings are the same as those in
respect ofthe original adventures or undertakings.
Q15 Explain relations of partners with third parties?
Ans.
1. PARTNER TO BE AGENT OF THE FIRM : Subject to the provisions of this Act, a partner is the agent of the
firm for the purposes of the business of the firm.
You mayrecall that a partnershipisthe relationship betweenthe partners who haveagreed to share
the profits of thebusiness carried on by all or any of them acting for all (Section 4). This definition
suggeststhatanyofthepartnerscanbetheagentoftheothers.

Chapter-3 : The Indian Partnership Act, 1932 - 111 -

 Itclariesthispositionbyprovidingthat,subjecttotheprovisionsoftheAct,apartneristheagentof
thefirmforthepurposeofthebusinessofthefirm.Thepartnerindeedvirtuallyembracesthecharacter
ofbothaprincipalandanagent.Sofarasheactsforhimselfandinhisowninterestinthecommon
concernofthepartnership,hemayproperlybedeemedaprincipalandsofarasheactsforhispartners,
hemayproperlybedeemedasanagent.
Theprincipaldistinction between him and a mere agent is that hehasacommunity of interestwith
other partnersinthewholepropertyandbusinessandliabilitiesofpartnership,whereasanagent as
suchhasnointerestineither.
Therulethatapartneristheagentofthefirmforthepurposeofthebusinessofthefirmcannotbe
applied toall transactions anddealingsbetween the partnersthemselves.It isapplicable onlyto the
actdonebypartnersforthepurposeofthebusinessofthefirm.
2. IMPLIED AUTHORITY OF PARTNER AS AGENT OF THE FIRM : Subjecttotheprovisionsofsection22,the
actofapartnerwhichisdonetocarryon,intheusualway,businessofthekindcarriedonbythefirm,
binds the firm.
Theauthorityofapartnertobindthefirmconferredbythissectioniscalledhis“impliedauthority”.
(2) Intheabsenceofanyusageorcustomoftradetothecontrary,theimpliedauthorityofapartner
doesnotempowerhimto
(a) Submitadisputerelatingtothebusinessofthefirmtoarbitration;
(b) openabankingaccountonbehalfofthefirminhisownname;
(c) compromiseorrelinquishanyclaimorportionofaclaimbythefirm;
(d) withdrawasuitorproceedingsledonbehalfofthefirm;
(e) admitanyliabilityinasuitorproceedingsagainstthefirm;
(f) acquireimmovablepropertyon behalfofthefirm;
(g) transfer immovable propertybelonging to the firm;and
(h) enterintopartnershiponbehalfofthefirm.
Itis however subjectto the following restrictions:
1. Theactdonemustrelatetotheusualbusinessofthefirm,thatis,theactdonebythepartnermustbe
withinthescopeofhisauthorityandrelatedtothenormalbusinessofthefirm.
2. Theactissuchasisdonefornormalconductofbusinessofthefirm.Theusualwayofcarryingonthe
businesswilldependonthenatureandcircumstancesofeachparticularcase[Section19(1)].
3. Theacttobedoneinthenameofthefirmorinanyothermannerexpressingorimplyinganintention
tobindthefirm
Ifpartnershipbeofageneralcommercialnature,
(i) hemaypledgeorsellthepartnership property;
(ii) hemaybuygoodsonaccountofthepartnership;
(iii) hemayborrowmoney,contractdebtsandpaydebtsonaccountofthepartnership;
(iv) hemaydraw,make,sign,endorse,transfer,negotiateandprocuretobediscounted,Promissory
notes,billsofexchange,chequesandothernegotiablepapersinthenameandonaccountofthe
partnership.
3. EXTENSION AND RESTRICTION OF PARTNERS’ IMPLIED AUTHORITY
The impliedauthority ofa partner may be extended or restricted bycontract between the partners.

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 Under the following conditions, the restrictions imposed on the implied authority of a partner by
agreementshallbeeffectiveagainstathird party:
1. Thethirdpartyknowsabouttherestrictions,and
2. Thethirdpartydoesnotknowthatheisdealingwithapartnerinafirm.
4. PARTNER’S AUTHORITY IN AN EMERGENCY
Apartnerhasauthority,inanemergency,todoallsuchactsforthepurposeofprotectingthefirmfrom
loss as would be done by a person of ordinary prudence, in his own case, acting under similar
circumstances,andsuchactsbindthefirm.
Q16 What is the effect of notice to acting partner ?
Ans. Thenoticetoapartner,whohabituallyactsinbusinessofthefirm,onmattersrelatingtotheaffairsof
thefirm,operatesasanoticetothefirmexceptinthecaseofafraudonthefirmcommittedbyorwith
the consent of that partner. Thus, the notice to one is equivalent to the notice to the rest of the
partnersofthefirm,justasanoticetoanagentisnoticetohisprincipal.Thisnoticemustbeactualand
notconstructive.Itmustbereceivedbyaworkingpartnerandnotbyasleepingpartner.Itmustfurther
relatetothefirm’sbusiness.Onlythenitwouldconstituteanoticetothefirm.
Theonlyexceptionwouldlieinthecaseoffraud,whetheractiveortacit.
Example:
A, a partner who actively participates in the management of the business of the firm, bought for his
firm, certain goods, while he knew of a particular defect in the goods. His knowledge asregards the
defect,ordinarily,wouldbeconstruedastheknowledgeofthefirm,thoughtheotherpartnersinfact
were not aware of the defect. But because A had, in league with his seller, conspired to conceal the
defectfromtheotherpartners,therulewouldbeinoperativeandtheotherpartnerswouldbeentitled
torejectthegoods,upondetectionbythemofthedefect.
Q17 Write a note on liabilities of a partner to third parties ?
Ans.
1. LIABILITY OF A PARTNER FOR ACTS OF THE FIRM : Every partner is liable, jointly with all the other
partnersandalsoseverally,forallactsofthefirmdonewhileheisapartner.
The partners are jointly and severally responsible to third parties for all acts which come under the
scopeoftheirexpressorimpliedauthority.Thisis because thatalltheactsdonewithinthescopeof
authorityaretheactsdonetowardsthebusinessofthefirm.
Theexpression‘actoffirm’connotesanyactoromissionbyallthepartnersorbyanypartneroragent
ofthefirm,whichgivesrisetoarightenforceablebyoragainstthefirm.Againinordertobringacase
underSection25,itisnecessarythattheactofthefirm,inrespectofwhichliabilityisbroughttobe
enforcedagainstaparty,musthavebeendonewhilehewasapartner.
2. LIABILITY OF THE FIRM FOR WRONGFUL ACTS OF A PARTNER : Thefirmisliabletothesameextentas
thepartnerforanylossorinjurycausedtoathirdpartybythewrongfulactsofapartner,iftheyare
donebythepartnerwhileacting.
(a) intheordinarycourseofthebusinessofthefirm
(b) withtheauthorityofthepartners.
If the act in question can be regarded as authorized and as falling within either of the categories
mentionedinSection26,thefactthatthemethodemployedbythepartnerindoingitwasunauthorized
orwrongfulwouldnotaffectthequestion.Furthermore,allthepartnersinafirmareliabletoathird
partyforlossorinjurycausedtohimbythenegligentactofapartneractingintheordinarycourseof
the business.

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 3. LIABILITY OF FIRM FOR MISAPPLICATION BY PARTNERS
(a) apartneractingwithinhisapparentauthorityreceivesmoneyorpropertyfromathirdpartyand
misapplies it, or
(b) afirminthecourseofitsbusinessreceivesmoneyorpropertyfromathirdparty,andthemoney
orpropertyismisappliedbyanyofthepartnerswhileitisinthecustodyofthefirm,thefirmis
liabletomakegoodtheloss.
Q18 Write a note on rights of transferee of partner, interest ?
Ans. A share ina partnership is transferable like any other property, but as the partnership relationship is
basedonmutualconfidence,theassigneeofapartner’sinterestbysale,mortgageorotherwisecannot
enjoy the samerightsand privilegesasthe originalpartner.
Therightsofsuchatransfereeareasfollows:
(1) During thecontinuance of partnership, suchtransfereeis notentitled
(a) tointerferewiththe conductofthebusiness,
(b) torequireaccounts,or
(c) toinspectbooksofthefirm.
Heisonlyentitledtoreceivetheshareoftheprofitsofthetransferringpartnerandheisboundto
accepttheprofitsasagreedtobythepartners,i.e.,hecannotchallengetheaccounts.
(2) Onthedissolution ofthefirmoronthe retirementofthetransferring partner,the transfereewill be
entitled, against the remaining partners:
(a) toreceivetheshareoftheassetsofthefirmtowhichthetransferringpartnerwasentitled,and
(b) forthepurposeofascertainingtheshare,
heisentitledtoanaccountasfromthedateofthedissolution.
ByvirtueofSection31,whichwewilldiscusshereinafter,nopersoncanbeintroducedasapartnerinafirm
withouttheconsentofallthepartners.Apartnercannotbytransferringhisowninterest,makeanybodyelse
apartnerinhisplace,unlesstheotherpartnersagreetoacceptthatpersonasapartner.Atthesametime,a
partnerisnotdebarredfromtransferringhisinterest.Apartner’sinterestinthepartnershipcanberegarded
asanexistinginterestandtangiblepropertywhichcanbeassigned.
Q19 Explain status of minor if admitted to partnership ?
Ans. Youhaveobservedthataminorcannotbeboundbyacontractbecauseaminor’scontractisvoidand
not merely voidable. Therefore, a minor cannot become a partner in a firm because partnership is
foundedonacontract.Thoughaminorcannotbeapartnerinafirm,hecannonethelessbeadmitted
tothe benefits of partnership underSection 30 ofthe Act. In otherwords, hecan bevalidly givena
shareinthepartnershipprofits.Whenthishasbeendoneanditcanbedonewiththeconsentofallthe
partnersthentherightsandliabilitiesofsuchapartnerwillbegovernedunderSection30asfollows:
(1) Rights:
(i) Aminorpartnerhasarighttohisagreedshareoftheprofitsandofthefirm.
(ii) Hecanhaveaccessto,inspectandcopytheaccountsofthefirm.
(iii) He can sue the partners for accounts or for payment of his share but only when severing his
connection with the firm,and not otherwise.
(iv) On attaining majority he may within 6 months elect to become a partner or not to become a
partner.Ifheelectstobecomeapartner,thenheisentitledtothesharetowhichhewasentitled
asaminor.Ifhedoesnot,thenhisshareisnotliableforanyactsofthefirmafterthedateofthe
public notice servedto that effect.

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 (2) Liabilities:
(i) Before attaining majority:
(a) Theliabilityoftheminorisconnedonlytotheextentofhisshareintheprofitsandthe
propertyofthefirm.
(b) Minorhasnopersonalliabilityforthedebtsofthefirmincurredduringhisminority.
(c) Minorcannotbedeclaredinsolvent,butifthefirmisdeclaredinsolventhisshareinthe
firmvestsintheOfficialReceiver/Assignee.
(ii) After attaining majority:
Within6monthsofhisattainingmajorityoronhisobtainingknowledgethathehadbeenadmitted
tothebenefitsofpartnership,whicheverdateislater,theminorpartnerhastodecidewhether
heshallremainapartnerorleavethefirm.
Wherehehaselectednottobecomepartnerhemaygivepublicnoticethathehaselectednotto
becomepartnerandsuchnoticeshalldeterminehispositionasregardsthefirm.Ifhefailstogive
suchnoticeheshallbecomeapartnerinthefirmontheexpiryofthesaidsixmonths.
(a) When he becomes partner: Iftheminorbecomesapartneronhisownwillingnessorbyhis
failure to give thepublic notice within specified time, his rights and liabilities as given in
Section30(7)areasfollows:
(i) Hebecomespersonallyliabletothirdpartiesforallactsofthefirmdonesincehewas
admitted to the benefits of partnership.
(ii) Hisshareinthepropertyandtheprofitsofthefirmremainsthesametowhichhewas
entitledas aminor.
(b) When he elects not to become a partner:
(i) Hisrightsandliabilitiescontinuetobethoseofaminoruptothedateofgivingpublic
notice.
(ii) Hisshareshallnotbeliableforanyactsofthefirmdoneafterthedateofthenotice.
(iii) Heshallbeentitledtosuethepartnersforhisshareofthepropertyandprofits.Itmay
benotedthatsuchminorshallgivenoticetotheRegistrarthathehasorhasnotbecome
apartner.
Q20 Right a note on reconstitution of partnership.
Ans.
(i) INTRODUCTION OF A PARTNER : Aswehavestudiedearlier,subjecttoacontractbetweenpartnersand
totheprovisionsregardingminorsinafirm,nonewpartnerscanbeintroducedintoafirmwithoutthe
consentof all the existing partners.
Rights and liabilities of new partner: Theliabilitiesofthenewpartnerordinarilycommencefromthe
datewhenheisadmittedasapartner,unlessheagreestobeliableforobligationsincurredbythefirm
priortothedate.Thenewfirm,includingthenewpartnerwhojoinsit,mayagreetoassumeliability
fortheexistingdebtsoftheoldfirm,andcreditorsmayagreetoacceptthenewfirmastheirdebtor
anddischargetheoldpartners.Thecreditor’sconsentisnecessaryineverycasetomakethetransaction
operative. Novation is the technical term in a contract for substituted liability, of course, not conned
onlytocaseofpartnership.
ButamereagreementamongstpartnerscannotoperateasNovation.Thus,anagreementbetweenthe
partners and the incoming partner that he shall be liable for existing debts will not ipso facto give
creditorsofthefirmanyrightagainsthim.
Chapter-3 : The Indian Partnership Act, 1932 - 115 -
 (ii) RETIREMENT OF A PARTNER
(a) withtheconsentofalltheotherpartners;
(b) inaccordancewithanexpressagreementbythepartners;or
(c) wherethepartnershipisatwill,bygivingnoticeinwritingtoalltheotherpartnersofhisintention
to retire.
(2) A retiring partner may be discharged fromany liability to any third party for acts of thefirm done
before his retirement by an agreement made by him with such third party and the partners of the
reconstitutedfirm,andsuchagreementmaybeimpliedbyacourseofdealingbetweenthethirdparty
andthe reconstitutedfirmafterhe had knowledgeof theretirement.
(3) Notwithstandingtheretirementofapartnerfromafirm,heandthepartnerscontinuetobeliableas
partnerstothirdpartiesforanyactdonebyanyofthemwhichwouldhavebeenanactofthefirmif
done before theretirement, until public notice is given of theretirement:
Providedthataretiredpartnerisnotliabletoanythirdpartywhodealswiththefirmwithoutknowing
thathewasapartner.
(4) Noticesundersubsection(3)maybegivenbytheretiredpartnerorbyanypartnerofthereconstituted
firm.

(iii) EXPULSION OF A PARTNER

(i) thepowerofexpulsionmusthaveexistedinacontractbetweenthepartners;
(ii) thepowerhasbeenexercisedbyamajorityofthepartners;and
(iii) ithasbeen exercised ingood faith.
Ifalltheseconditionsarenotpresent,theexpulsionis notdeemedtobeinbonadeinterestof
thebusinessof the firm.
ThetestofgoodfaithasrequiredunderSection33(1)includesthreethings:

If a partner is otherwise expelled, the expulsion is null and void.

ItmaybenotedthatundertheAct,theexpulsionofpartnersdoesnotnecessarilyresultindissolution
of the firm. The invalid expulsion of a partner does not put an end to the partnership even if the
partnershipisatwillanditwillbedeemedtocontinue asbefore.

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 (iv) INSOLVENCY OF A PARTNER
(1) Where a partner in afirmisadjudicatedaninsolventhe ceases to be a partneron thedate on
whichthe orderofadjudicationismade,whetherornotthefirmisherebydissolved.
(2) Where underacontractbetween thepartnersthefirmisnotdissolved bytheadjudicationofa
partnerasaninsolvent,theestateofapartnersoadjudicatedisnotliableforanyactofthefirm
andthefirmisnotliableforanyactoftheinsolvent,doneafterthedateonwhichtheorderof
adjudication is made.
(v) Liability of estate of deceased partner
Ordinarily,theeffectofthedeathofapartneristhedissolutionofthepartnership,buttheruleinregard
tothedissolutionofthepartnership,bydeathofpartnerissubjecttoacontractbetweenthepartiesand
the partners are competent to agree that the death of one will not have the effect of dissolving the
partnershipasregardsthesurvivingpartnersunlessthefirmconsistsofonlytwopartners.Inorderthat
theestateofthedeceasedpartnermaybeabsolvedfromliabilityforthefutureobligationsofthefirm,
itisnotnecessarytogiveanynoticeeithertothepublicorthepersonshavingdealingswiththefirm.

CLASS WORK

THEORETICAL QUESTIONS

1. Whatdoyoumeanby“impliedauthority”ofthepartnersinafirm?
2. State the modes by which a partner may transfer his interest in the rm in favour of another person
undertheIndianPartnershipAct,1932.Whataretherightsofsuchatransferee?
3. Whetheraminormaybeadmittedinthebusinessofapartnershiprm?Explaintherightsofaminorin
the partnership firm.

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 UNIT 3: REGISTRATION AND DISSOLUTION OF A FIRM

Q21 Is registration of firm is compulsory ? What details required to be provided ?

Ans. TheregistrationofafirmmaybeeffectedatanytimebysendingbypostordeliveringtotheRegistrar
oftheareainwhichanyplaceofbusinessofthefirmissituatedorproposedtobesituated,astatement
intheprescribedformandaccompanied by theprescribed fee,stating
(a) The firm’s name
(b) Theplaceorprincipalplaceofbusinessofthefirm,
(c) Thenamesofanyotherplaceswherethefirmcarriesonbusiness,
(d) thedatewheneachpartnerjoinedthefirm,
(e) thenamesinfullandpermanentaddressesofthepartners,and
(f) thedurationofthefirm.
Thestatement shallbesignedby allthepartners, orbytheir agentsspeciallyauthorizedinthisbehalf.
(2) Eachpersonsigningthe statementshallalsoverifyitinthemannerprescribed.
(3) Afirmnameshallnotcontainanyofthefollowingwords,namely:
‘Crown’, Emperor’, ‘Empress’, ‘Empire’, ‘Imperial’, ‘King’, ‘Queen’, ‘Royal’, or words expressing or implying
thesanction,approvalorpatronageofGovernmentexceptwhentheStateGovernmentsignifiesitsconsent
totheuseofsuchwordsaspartofthefirmnamebyorderinwriting.
When the Registrar is satisfied that the above mentioned provisions have been complied with, he shall
recordanentryofthisstatementintheregister(calledtheRegisterofFirms)andshalllethestatement.
Subsequentalterationsinthename,place,constitution,etc.,ofthefirmthatmayoccurduringitscontinuance
should also be registered.
When the Registrar is satisfied that the provisions of Section 58 have been duly complied with, he shall
recordanentryofthestatementinaRegistercalledtheRegisterofFirmsandshalllethestatement.Thenhe
shall issue a certificate of Registration. However, registration is deemed to be completed as soon as an
application intheprescribed form withtheprescribedfeeandnecessarydetails concerningthe particulars
ofpartnershipisdeliveredtotheRegistrar.Therecordingofanentryintheregisteroffirmsisaroutineduty
of Registrar.
Registrationmayalsobeeffectedevenafterasuithasbeenledbythefirmbutinthatcaseitisnecessaryto
withdrawthesuitfirstandgetthefirmregisteredandthenleafreshsuit.
Q22 What are the consequences of non registration of firm ?
Ans. Disabilities of non registration are :
(i) No suit in a civil court by firm or other copartners against third party: Thefirmoranyotherpersonon
itsbehalfcannotbringanactionagainstthethirdpartyforbreachofcontractenteredintobythefirm,
unlessthefirmisregisteredandthepersonssuingareorhavebeenshownintheregisteroffirmsas
partnersinthefirm.Inotherwords,aregisteredfirmcanonlyleasuitagainst athird partyandthe
personssuinghavebeenintheregisteroffirmsaspartnersinthefirm.
(ii) No relief to partners for setoff of claim: Ifanactionisbroughtagainstthefirmbyathirdparty,then
neitherthefirmnorthepartnercanclaimanysetoff,ifthesuitbevaluedformorethan‘100orpursue
otherproceedingstoenforcetherightsarisingfromanycontract.

Chapter-3 : The Indian Partnership Act, 1932 - 121 -

 (iii) Aggrieved partner cannot bring legal action against other partner or the firm: Apartnerofanunregistered
firm(oranyotherpersononhisbehalf)isprecludedfrombringinglegalactionagainstthefirmorany
personallegedtobeortohavebeenapartnerinthefirm.But,suchapersonmaysuefordissolution
ofthefirmorforaccountsandrealizationofhisshareinthefirm’spropertywherethefirmisdissolved.
(iv) Third party can sue the firm: Incaseofanunregisteredfirm,anactioncanbebroughtagainstthefirm
byathirdparty.
Exceptions: Nonregistration of a firm doesnot,howevereffect the followingrights:
1. Therightofthirdpartiestosuethefirmoranypartner.
2. Therightof partnerstosueforthedissolutionofthefirm orforthe settlementof the accountsofa
dissolvedfirm,orforrealizationofthepropertyof adissolvedfirm.
3. ThepowerofanOfficialAssignees,ReceiverofCourttoreleasethepropertyoftheinsolventpartner
andtobringanaction.
4. Therighttosueorclaimasetoffifthevalueofsuitdoesnotexceed‘100invalue.
Q23 Indicate points of difference between dissolution of partnership and dissolution of firm ?
Ans.
S. No. Basis of Difference Dissolution of Firm Dissolution of Partnership
1. Continuation of business It involvesdiscontinuation of Itdoesnota ectconnuaon
business in partnership. of business. It involves only
reconstitution of the firm.
2. Winding up Itinvolveswindingupofthefirm It involves only reconstitution
and requires realization of assets and requires only revaluation of
and settlement of liabilities. assets and liabilities of the firm.
3. Orderofcourt Afirmmaybedissolvedbythe Dissolution of partnership is not
orderofthecourt. orderedbythecourt.
4. Scope It necessarily involves dissolution Itmayormaynotinvolve
of partnership. dissolution of firm.
5. Finalclosureofbooks It involvesfinal closureof books Itdoesnotinvolve finalclosure of
ofthefirm. the books.
Q24 Write a note on model of dissolution of firm ?
Ans. Thedissolutionofpartnershipfirmmaybeinanyofthefollowingways:
1. DISSOLUTION WITHOUT THE ORDER OF THE COURT OR VOLUNTARY DISSOLUTION:
Itconsists of following four types:
(i) Dissolution by agreement
Afirmmaybedissolvedwiththeconsentofallthepartnersorinaccordancewithacontractbetween
the partners.
(ii) Compulsory dissolution
Afirmiscompulsorilydissolvedbythehappeningofanyeventwhichmakesitunlawfulforthebusiness
ofthefirmtobecarriedonorforthepartnerstocarryitoninpartnership:
Providedthat,whenmorethanoneseparateadventureor undertakingiscarriedonbythe firm,the
illegality of one or more shall not of itself cause the dissolution of the firm in respect of its lawful
adventures and undertakings.

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 (iii) Dissolution on the happening of certain contingencies : Subjecttocontractbetweenthepartners,a
firmcanbedissolvedonthehappeningof anyofthe followingcontingencies.

(iv) Dissolution by notice of partnership at will :

(1) Wherethepartnershipisatwill,thefirmmaybedissolvedbyanypartnergivingnoticeinwriting
toalltheotherpartnersofhisintentiontodissolvethefirm.
(2) If the date is mentioned, the firm is dissolved as from the datementioned in the notice as the
dateofdissolution,orifnodateissomentioned,asfromthedateofthecommunicationofthe
notice.
(2) DISSOLUTION BY THE COURT :
Courtmay,atthesuitofthepartner,dissolveafirmonanyofthefollowingground:
(a) Insanity/unsoundmind:Whereapartner(notasleepingpartner)hasbecomeofunsoundmind,
thecourtmaydissolvethefirmonasuitoftheotherpartnersorbythenextfriendoftheinsane
partner. Temporarysicknessisnoground for dissolutionoffirm.
(b) Permanent incapacity: When a partner, other than the partner suing, has become in any way
permanentlyincapableofperforminghisdutiesaspartner,thenthecourtmaydissolvethefirm.
Suchpermanent incapacitymay resultfrom physicaldisability orillnessetc.
(c) Misconduct:Whereapartner,otherthanthepartnersuing,isguiltyofconductwhichislikelyto
affectprejudiciallythecarryingonofbusiness,thecourtmayorderfordissolutionofthefirm,by
giving regard to the nature of business. It is not necessary that misconduct must relate to the
conductofthebusiness.Theimportantpointistheadverseeffectofmisconductonthebusiness.
Ineachcasenatureofbusinesswilldecidewhetheranactismisconductornot.
(d) Persistent breach of agreement: Where a partner other than the partner suing, wilfully or
persistentlycommitsbreachofagreementsrelatingtothemanagementoftheaffairsofthefirm
ortheconductofitsbusiness,orotherwisesoconducthimselfinmattersrelatingtothebusiness
thatitisnotreasonablypracticableforotherpartnerstocarryonthebusinessinpartnership with
him,thenthecourtmaydissolvethefirmattheinstanceofanyofthepartners.Followingcomes
intocategoryofbreachofcontract:

Chapter-3 : The Indian Partnership Act, 1932 - 123 -

 Â Embezzlement,
 Keepingerroneousaccounts
 Holdingmorecashthanallowed
 Refusaltoshowaccountsdespiterepeatedrequestetc.
(e) Transferofinterest:Where apartnerotherthanthepartner suing, has transferredthewhole of
hisinterestinthefirmtoathirdpartyorhasallowedhissharetobechargedorsoldbythecourt,
intherecoveryofarrearsoflandrevenue,thecourtmaydissolvethefirmattheinstanceofany
other partner.
(f) Continuous/Perpetual losses: Where the business of the firm cannot be carried on except at a
lossinfuturealso,thecourtmayorderforitsdissolution.
(g) Justandequitablegrounds:Wherethecourtconsidersanyothergroundtobejustandequitable
forthedissolutionofthefirm,itmaydissolveafirm.Thefollowingarethecasesforthejustand
equitable grounds
(i) Deadlockinthe management.
(ii) Wherethepartnersarenotintalkingtermsbetweenthem.
(iii) Lossofsubstratum.
(iv) Gamblingbyapartneronastockexchange.
Q25 Write a note on consequences of dissolution of firm.
Ans.
(a) Liability for acts of partners done after dissolution : (1)Notwithstandingthedissolutionofafirm,the
partnerscontinuetobeliableassuchtothirdpartiesforanyactdonebyanyofthemwhichwouldhave
beenanactofthefirmifdone beforethe dissolution,untilpublicnotice isgivenofthedissolution:
Providedthattheestateofapartnerwhodies,orwhoisadjudicatedaninsolvent,orofapartnerwho,
nothavingbeenknowntothepersondealingwiththefirmtobeapartner,retiresfromthefirm,isnot
liableunderthissectionforactsdoneafterthedateonwhichheceasestobeapartner.
(2) Noticesundersubsection(1)maybegivenbyanypartner
(b) Right of partners to have business wound up after dissolution : On the dissolution of a firm every
partner or his representative is entitled, as against all the other partners or their representative, to
havethepropertyofthefirmapplied inpayment ofthe debtsandliabilitiesofthefirm,andtohave
thesurplusdistributedamongthe partnersortheir representativesaccordingto theirrights.
(c) Continuing authority of partners for purposes of winding up : Afterthedissolutionofafirmtheauthority
ofeachpartnertobindthefirm,andtheothermutualrightsandobligationsofthepartners,continue
notwithstandingthedissolution,sofarasmaybenecessaryto winduptheaffairsofthefirmand to
completetransactionsbegunbutunfinishedatthetimeofthedissolution,butnototherwise:Provided
thatthefirmisinnocaseboundbytheactsofapartnerwhohasbeenadjudicatedinsolvent;butthis
provisodoesnotaffecttheliabilityofanypersonwhohasaftertheadjudicationrepresentedhimself
or knowinglypermittedhimselfto berepresentedas apartneroftheinsolvent.
(d) Settlement of partnership accounts : Insettlingtheaccountsofafirmafterdissolution,thefollowing
rules shall,subject toagreementbythe partners,be observed:
(i) Losses,includingdeficienciesofcapital,shallbepaidfirstoutofprofits,nextoutofcapital,and,
lastly,ifnecessary,bythepartnersindividuallyin theproportionsinwhich theywereentitledto
share profits.

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 (ii) Theassetsofthefirm,includinganysumscontributedbythepartnerstomakeupdeficienciesof
capital,mustbe appliedinthefollowingmannerandorder:
(a) inpayingthedebtsofthefirmtothirdparties;
(b) inpayingtoeachpartnerrateablywhatisduetohimfromcapital;
(c) inpayingtoeachpartnerrateablywhatisduetohimonaccountofcapital;and
(d) theresidue,ifany,shallbedividedamongthepartnersintheproportionsinwhichthey
wereentitledtoshareprofits.
(e) Payment of firm debts and of separate debts : Wheretherearejointdebtsduefromthefirmandalso
separatedebtsduefromanypartner:
(i) thepropertyofthefirmshallbeappliedinthefirstinstanceinpaymentofthedebtsofthefirm,
andifthereisanysurplus,thentheshareofeachpartnershallbeappliedtothepaymentofhis
separatedebtsorpaidtohim;
(ii) theseparate propertyofany partnershall beappliedfirstinthepaymentofhisseparatedebts
andsurplus,ifany,inthepaymentofdebtsofthefirm.
(f) Personal profits earned after dissolution : Whereafirmisdissolvedbythedeathofapartnerandthe
surviving partners or the surviving partners along with the representatives of the deceased partner
carryonbusinessofthefirm,anypersonalprofitsbythem,beforethefirmisfullywoundup,mustbe
accounted for by them to other partners. Thus, a lease expiring on the death of a partner, which is
renewed by the surviving partners, before final winding up, belongs to the partnership.
ThissectionhastobereadwithSection53whichprovidesthatintheabsenceofanagreementtothe
contrary, each partner orhis representativeis entitled torestrain (by injunction)other partnersfrom
carryingonasimilarbusinessinthenameofthefirmorfromusingthepropertyofthefirmfortheir
ownbenefittilltheaffairsofthefirmare completelywoundup.
(g) Return of premium on premature dissolution : AccordingtoSection 51,inthecase ofdissolution of
partnershipearlierthantheperiodxedforit,thepartnerpayingthepremiumisentitledtothereturn
ofthepremiumofsuchpartthereofasmaybereasonable,regardbeinghadtothetermsofagreement
andtothelengthoftimeduringwhichhewasapartner,exceptwhenthepartnershipisdissolved:
(1) bythedeathofoneofthepartners;
(2) mainlyduetothemisconductofthepartnerpayingthepremium;
(3) pursuant to an agreement containing no provisions for the returnof the premium or any part
thereof.
The partner paying the premium gets a proportionate part of the premium where thepartnership is
dissolved:
(1) Withoutthefaultofeitherparty;or
(2) owingtothefaultofboth;or
(3) onaccountofthefaultofthepartnerreceivingthepremium;or
(4) duetotheinsolvencyofthepartnerreceivingthepremium,wherethepartnerpayingthepremium
wasunawareoftheothersembarrassingcircumstancesatthetimeofenteringintothepartnership.
(h) Rights where partnership contract is rescinded for fraud or misrepresentation : Whereacontractcreating
partnershipisrescindedonthegroundoffraudormisrepresentationofanyofthepartiesthereto,the
party entitled to rescind is entitled;
(1) toalienonthesurplusortheassetsofthefirmremainingafterthedebtsofthefirmhavebeen
paid,foranysumpaidbyhimforthepurchaseofashareinthefirmandforanycapitalcontributed
byhim;

Chapter-3 : The Indian Partnership Act, 1932 - 125 -

 (2) torankasacreditorofthefirminrespectofanypaymentmadebyhimtowardsthedebtsofthe
firm;and
(3) toanindemnityfromthepartnersguiltyoffraudormisrepresentationagainstallthedebtsofthe
firm.
(i) Sale of Goodwill after dissolution : (1)Insettlingtheaccountsofafirmafterdissolution,thegoodwill
shall, subject to contractbetween the partners, beincluded in the assets, and it may be sold either
separatelyoralongwithotherpropertyofthefirm.
Rights of buyer and seller of goodwill: (2) Where the goodwill of a firm is sold after dissolution, a
partnermaycarryonabusinesscompetingwiththatofthebuyerandhemayadvertisesuchbusiness,
butsubjecttoagreementbetweenhimandthebuyer,hemaynot,
(a) usethe firmname,
(b) representhimselfascarryingonthebusinessofthefirm,or
(c) solicit thecustom ofpersonswhoweredealing with thefirmbeforeits dissolution.
Agreement in restraint of trade: (3)Anypartnermay,uponthesaleofthegoodwillofafirm,makean
agreementwiththebuyerthatsuchpartnerwillnotcarryonanybusinesssimilartothatofthefirm
within a specified period or within specified local limits, and, notwithstanding anything contained in
section27oftheIndianContractAct,1872suchagreementshallbevalidiftherestrictionsimposedare
reasonable.
Q26 What are the modes of giving Public notice.
Ans. ApublicnoticeunderthisAct isgiven
(a) Whereitrelatestotheretirementorexpulsionofapartnerfromaregisteredfirm,ortothedissolution
ofaregisteredfirm,ortotheelectiontobecomeornottobecomeapartnerinaregisteredfirmbya
personattaintingmajoritywhowasadmittedasaminortothebenefitsofpartnership,bynoticetothe
Registrar of Firms under section 63, and by publication in the Official Gazette and in at least one
vernacular newspaper circulation in the district where the firm to which it relates has its place or
principal place of business,and
(b) in any other case, by publication in the Official Gazette and in at least one vernacular newspaper
circulatinginthedistrictwherethefirmtowhichitrelateshasitsplaceorprincipalplaceofbusiness.

CLASS WORK

THEORETICAL QUESTIONS

1. WhatistheprocedureofregistrationofapartnershiprmundertheIndianPartnershipAct,1932?What
are the consequences of nonregistration?
2. WhendoesdissolutionofapartnershipfirmtakeplaceundertheprovisionsoftheIndianPartnership
Act,1932?Explain.

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 HOME WORK1

1. AandBweretwopartnersinafirmofsugardealers.UnknowntoB,Asuppliesataparticulartimehis
ownstockofsugartothefirmatmarketpriceandmakesprofit.Canhepersonallykeepthisprofit?
Hint: No. profit from competitive business
2. AandB,coownersofa house,letittoapayingguest.Theydividethenetrentsbetweenthem.Are
they partners?
Hint: No.considerdifference of partnershipandcoownership
3. X,Yand Zcarryonbusiness on partnershipbasis.A towhom they sentgoodsforsale oncommission
basis,secretly allowsZashare in thecommission, which he receivesinconsiderationof Z’s using his
influencetosendgoodstohim.XandYcometoknowofthesecretdealofZ.XandYaskZtoaccount
forthecommissionandshareitwiththem,butZrefuses.Decide.
Hint:Yes.consider privateprofitsbypartners
4. D,JandAareonlypartnersinafirm.Theydecidetodissolvethepartnershipwitheffectfrom1stApril,
1988.Thepartnersdonotgiveapublicnoticeofthedissolution,butcontinuethebusiness.Duringthe
courseofbusiness,D,JandAendorsecertainBillsofExchangeofthepartnershiptoathirdpartyM,
whowasnotawareofthedissolution.M,thethirdparty,hadsuppliedcertainstationerytothefirm.
TheBillsofExchangearedishonoured.ThethirdpartyMwantstoclaimthemoney.
Decide:
Whetherthefirm willbeliabletopayforthebillsofexchange?
Hint:Yes.considereffects of not givingpublicnotice
5. A,BandCarepartnersinafirmcalledABC.A,withthe intentionofdeceivingD,asupplierof office
stationery, buys certain stationery on behalf of the ABC firm. The stationery is of use in theordinary
courseofthefirm’sbusiness.Adoesnotgivethestationerytothefirm,insteadbringsittohisownuse.
ThesupplierD,whoisunawareoftheprivateuseofstationerybyA,claimsthepricefromthefirm.The
firmrefusestopayfortheprice,onthegroundthatthestationerywasneverreceivedbyit.Decide:
(i) Whether thefirm’s contention is tenable?
Hint: No.considertransaction ofpartnerswithimpliedauthorities
6. Ram and Kishan were partners in a business as suppliers of leather goods and they were regular
contractors to the Government. Kishan, without the knowledgeof Ram, supplied to the Government
certainleathergoodsinwhichthefirmwasalsodealingandmadesubstantialprofits.
CanRamclaimtheprofitearnedbyKishan?Explain.
Hint: Yes. profit from competitive business
7. AandBarepartnersinafirmdealingincloth.Aplacedanorderinthefirm’snameandonthefirm’s
letterpadforfive bagsofwheattobesupplied athisresidence.Is thefirmliabletopaythepriceof
wheat?
Hint: Yes. consider transaction of partners with implied authorities.

Chapter-3 : The Indian Partnership Act, 1932 - 127 -

8. A and Bwere partners in a firm dealingin purchaseand sale of cloth.Bstarted cloth manufacturing
businessindividually.CanAaskBtosharetheprofitsofcloth manufacturingbusinesswithhim?
Hint: No. profit from competitive business
9. A,BandCarepartnersofanunregisteredfirm.Dowesthisfirm‘1,000onacontract.Thefirmfilesasuit
againstD.Thesuitisdismissedfornonregistrationofthefirm.Thefirmisregisteredlateron.Canthe
firmnowsuccessfullybringthesuitagainstD?
Hint: Yes. consider effects of non registration.
10. A,BandCwerepartnersinasharebroker’sfirm.X,acustomerofthefirm,deliveredcertainsecurities
tothefirmforsale.AandBsoldawaythesecuritieswithouttheknowledgeofCandmisappropriated
themoney.WhowillbeheldliabletoXforthepaymentofthepriceofsecurities?
Hint: firm.consider transaction of partners with implied authorities
11. A and B purchased a taxi to ply in partnership. They plied the taxi for a year when A, without the
consent of B, disposed of the taxi. B brought an action to recover his share in the sale proceeds. A
resistedB’sclaimonthegroundthatthefirmwasnotregistered.WillBsucceedinhisclaim?
Hint:Yesasitisamatterofcoowernership
12. Kumar,KishoreandKrishnaarepartnersinabusiness.Kumarisentitled,accordingtothetermsofthe
Partnershipdeed,to3/8thofthepartnershippropertyandprofits.Kumarretiresfromthefirm.Kishore
andKrishnacontinuethebusinessunderthenameofthefirm,withoutpayingouttheshareofKumar
in the assets of the firm or settling account with Kumar. Is Kumar entitled to any profits of the firm
madeafterthedateofhisretirement?
DecidestatingtheprovisionsoftheIndianPartnershipActinthisregard.
Hint:Yes.Subsequentprofitsor6%interestatthechoiceofkumar.
13. ‘A’isapublisher;heagreestopublishathisownexpenseabookwrittenby‘B’andtopay‘B’halfofthe
netprofits.DoesthiscreatearelationshipofpartnershipbetweenAandB?Givereasons.
Hint:No.Mutualagencyisneeded.

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 HOME WORK2

1. (i) Ram&Co.,afirmconsistsofthreepartnersA,BandChavingonethirdshareeachinthefirm.According
toAandB,theactivitiesofCarenotintheinterestofthepartnershipandthuswanttoexpelCfromthe
firm.AdviseAandBwhethertheycandosoquotingtherelevantprovisionsoftheIndianPartnership
Act,1932..(Hint: Yes Topic : Expulsion of a Partner)
(ii) WhatisPartnershipDeed?Whataretheparticularsthatthepartnershipdeedmaycontain?
(Topic: Partnership Deed)
[RTPNov18]
2. (i) Statethemodesbywhichapartner maytransferhisinterestinthe firmin favourofanotherperson
undertheIndianPartnershipAct,1932.Whataretherightsofsuchatransferee?
( Topic : Transfer of Interest of Partners)
(ii) State the grounds on which a firm may be dissolved by the Court under the Indian Partnership Act,
1932?(Topic : Dissolution of Partnership firm)
[RTPNov18]
3. (i) Whetheraminormaybeadmittedinthebusinessofapartnershipfirm?Explaintherightsofaminor
inthepartnershipfirm..(Topic: Position of Minor in Partnership Firm)
(ii) A&Co.isregisteredasapartnershipfirmin2015withA,BandCpartners.In2016,Adies.In2017,Band
C sue X inthenameand on behalfofA &Co., without freshregistration. Decide whetherthe suit is
maintainable.Whetheryouranswerwouldbesameifin2017BandChadtakenanewpartnerDand
thenfiledasuitagainstXwithoutfreshregistration?
(Hint: The suit can be maintained in this case . Topic: Registration of Partnership Firm)
[RTPMay18]
4. (i) A,BandCarepartnersinafirm.Aspertermsofthepartnershipdeed,Aisentitledto20percentofthe
partnership property and profits. A retires from the firm and dies after 15 days. B and C continue
business of the firm without settling accounts. Explain the rights of A’s legal representatives against
thefirmundertheIndianPartnershipAct,1932?
(Topic : Right of Legal Representatives of Partner)
(ii) State the differences between Partnership and Hindu Undivided Family.
(Topic: Difference between Partnership and HUF)
[RTPMay18]
5. (a) Whetheraminormaybeadmittedinthebusinessofapartnershipfirm?Explaintherightsofaminor
inthepartnershipfirm.(Topic: Position of Minor in Partnership Firm)
(b) A, Band C are partners in a firmcalled ABC Firm. A,with the intention of deceiving D, asupplier of
office stationery, buys certain stationery on behalf of the ABC Firm. The stationery is of use in the
ordinarycourseofthefirm’sbusiness.Adoesnotgivethestationerytothefirm,insteadbringsittohis
ownuse.ThesupplierD,whoisunawareoftheprivateuseofstationerybyA,claimsthepricefromthe
firm.Thefirmrefusestopayfortheprice,onthegroundthatthestationerywasneverreceivedbyit
(firm).ReferringtotheprovisionsoftheIndianPartnershipAct,1932decide:
(i) Whether the Firm’s contention shall be tenable?
(ii) WhatwouldbeyouranswerifapartofthestationerysopurchasedbyAwasdeliveredtothefirm
byhim,andtherestofthestationerywasusedbyhimforprivateuse,aboutwhichneitherthe
firmnorthesupplierDwasaware?
(Hint : Firm will be liable for the price of stationary. Topic : Implied Authority of partner)

Chapter-3 : The Indian Partnership Act, 1932 - 129 -

6.
(a) WhatisPartnership Deedandstate the informationcontainedtherein?( Topic : Partnership Deed)
(b) Intheabsenceofanyusageorcustomoftradetothecontrary,theimpliedauthorityofapartnerdoes
notempowerhimtodocertainacts.Statetheactswhicharebeyondtheimpliedauthorityofapartner
undertheprovisionsoftheIndianPartnershipAct,1932?( Topic : Implied Authority of partners)
(c) A,B,andCarepartnersofapartnershipfirmABC&Co.Thefirmisadealerinofficefurniture.Awasin
chargeofpurchaseandsale,BwasinchargeofmaintenanceofaccountsofthefirmandCwasincharge
ofhandlingalllegalmatters.Recentlythroughanagreementamongthem,itwasdecidedthatAwillbe
inchargeofmaintenanceofaccountsandBwillbeinchargeofpurchaseandsale.Beingignorantabout
suchagreement,M,asuppliersuppliedsomefurnituretoA,whoultimatelysoldthemtoathirdparty.
ReferringtotheprovisionsofthePartnershipAct,1932,advisewhetherMcanrecovermoneyfromthe
firm.
WhatwillbeyouradviceincaseMwashavingknowledgeabouttheagreement?
(Hint : M can recover money from firm in first case and he cannot recover money in second case Topic
: Implied Authority of Partners)
7. Subjecttoagreementbypartners,statetherulesthatshouldbeobserved bythe partnersinsettling
theaccountsofthefirmafterdissolutionundertheprovisionsoftheIndianPartnershipAct,1932.
(Hint : Settlement of Accounts on Dissolution of firm)
8. “Though a minor cannot be a partner in a firm, he can nonetheless be admitted to the benefits of
partnership.” [Sugg.Nov18]
(I) Referring to the provisions of the Indian Partnership Act, 1932, state the rights which can be
enjoyedbyaminorpartner. (4 Marks)
(II) A.Statetheliabilitiesofaminorpartnerboth:
(i)Beforeattainingmajorityand
(ii)Afterattainingmajority. (2 Marks)
OR
B.Statethelegalpositionofaminorpartnerafterattainingmajority:
(i)Whenheoptstobecomeapartnerofthesamefirm.
(ii)Whenhedecidenottobecomeapartner. (2 Marks)
9. Mr.A,Mr.Band Mr.Cwere partnersinapartnershipfirm3M/sABC&Co.,which isengagedinthe
businessoftradingofbrandedfurniture.Thenameofthepartnerswasclearlywrittenalongwiththe
firmnameinfrontoftheheadofficeofthefirmaswellasonletterheadofthefirm.On1 stOctober,
2018,Mr.Cpassedaway.Hisnamewasneitherremovedfromthelistofpartnersasstatedinfrontof
theheadofficenorfromtheletterheadsofthefirm.Asperthetermsofpartnership,thefirmcontinued
itsoperationswithMr.AandMr.Baspartners.Theaccountsofthefirmweresettledandtheamount
duetothelegalheirsofMr.Cwasalsodeterminedon10 thOctober,2018.Butthesamewasnotpaidto
thelegalheirsofMr.C.On16thOctober,2018,Mr.X,asuppliersuppliedfurnitureworth?20,00,000to
M/s ABC&Co.M/sABC&Co.couldnotrepaytheamountduetoheavylosses.Mr.Xwantstorecover
theamountnotonlyfromM/sABC&Co.,butalsofromthelegalheirsofMr.C.
AnalysetheabovesituationintermsoftheprovisionsoftheIndianPartnershipAct,1932anddecide
whetherthelegalheirsofMr.CcanalsobeheldliablefortheduestowardsMr.X.
[Sugg.Nov18, 3 Marks]

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10. Mr.M,Mr.NandMr.Pwerepartnersinafirm,whichwasdealinginrefrigerators.On1 stOctober,2018,
Mr.P retiredfrompartnership,butfailedtogivepublicnoticeofhisretirement.
Afterhisretirement,Mr.M,Mr.NandMr.Pvisitedatradefairandenquiredaboutsomerefrigerators
with latest techniques. Mr. X, who was exhibiting his refrigerators with the new techniques was
impressedwiththeinteractionsofMr.Pandrequestedforthevisitingcardofthefirm.Thevisitingcard
alsoincludedthenameofMr.Pasapartnereventhoughhehadalreadyretired.Mr.Xsuppliedsome
refrigeratorstothefirmandcouldnotrecoverhisduesfromthefirm.Now,Mr.Xwantstorecoverthe
duesnotonlyfromthefirm,butalsofromMr.P.Analysetheabovecaseintermsoftheprovisionsof
theIndianPartnershipAct,1932anddecidewhetherMr.Pisliableinthissituation.
[Sugg.Nov18, 3 Marks]
11. StateanyfourgroundsonwhichCourtmaydissolveapartnershipfirmincaseanypartnerfilesasuitfor
the same. [Sugg.Nov18, 4 Marks]
12. Distinguish between dissolution of firm and dissolution of partnership. [Sugg.May18, 2 Marks]
13. WhataretheconsequencesofNonRegistrationofaPartnershipFirm?Discuss.[Sugg.May18, 4 Marks]
14. X,YandZarepartnersinaPartnershipFirm.Theywerecarryingtheirbusinesssuccessfullyforthepast
several years.Spouses of X and Y fought in ladies club on their personal issue and X’s wife was hurt
badly. X got angry on the incident and he convinced Z to expel Y from their partnership firm. Y was
expelled frompartnership withoutany notice from X and Z. Considering the provisions of the Indian
PartnershipAct,1932,statewhethertheycanexpelapartnerfromthefirm.Whatarethecriteriafor
testofgoodfaithinsuchcircumstances? [Sugg.May18, 6 Marks]
15. What is the conclusive evidence of partnership? State the circumstances when partnership is not
considered between two or more parties. [Sugg.May18, 4 Marks]
16. “LLPisanalternativecorporatebusinessformthatgivesthebenefitsoflimitedliabilityofacompany
and the flexibility of a partnership”. Explain. [Sugg.May19, 5 Marks]
17. WhatistheprovisionrelatedtotheeffectofnoticetoanactingpartnerofthefirmaspertheIndian
PartnershipAct,1932? [Sugg.May19, 2 Marks]
OR
DiscusstheprovisionsregardingpersonalprofitsearnedbyapartnerundertheIndianPartnershipAct,
1932?
18. “Whetheragroupofpersonsisorisnotafirm,orwhetherapersonisornotapartnerinafirm.”Explain
themodeofdeterminingexistenceofpartnershipaspertheIndianPartnershipAct,1932?
[Sugg.May19, 4 Marks]
19. M/sXYZ&Associates,apartnershipfirmwithX,Y,Zasseniorpartnerswereengagedinthebusinessof
carpetmanufacturingandexportingtoforeigncountries.On25thAugust,2016,theyinductedMr.G,an
expertinthefieldofcarpetmanufacturingastheirpartner.On10thJanuary2018,Mr.Gwasblamedfor
unauthorizedactivitiesandthusexpelledfromthepartnershipbyunitedapprovalofrestofthepartners.
(i) Examinewhetheractionbythepartnerswasjustifiedornot?
(ii) Whatshouldhavethefactorstobekeptinmindpriorexpellingapartnerfromthefirmbyother
partnersaccordingtotheprovisionsoftheIndianPartnershipAct,1932?[Sugg.May19, 6 Marks]
20. “Indian Partnership Act does not make the registration of firms compulsory nor does it impose any
penalty for nonregistration.” Explain. Discuss the various disabilities or disadvantages that a non
registered partnership firmcan face in brief? [Sugg.May19, 4 Marks]

Chapter-3 : The Indian Partnership Act, 1932 - 131 -

21. WhenthecontinuingguaranteecanberevokedundertheIndianPartnershipAct,1932?
[Sugg.Nov19, 2 Marks]
OR
WhatdoyoumeanbyGoodwillaspertheprovisionsofIndianPartnershipAct,1932?
[Q.Paper N19]
22. WithreferencetotheprovisionsofIndianpartnershipAct,1932explainthevariouseffectsofinsolvency
ofapartner. [Sugg.Nov19, 4 Marks]
23. Master X was introduced to the benefits of partnership of M/s ABC & Co. with the consent of all
partners.Afterattainingmajority,morethansixmonthselapsedandhefailedtogiveapublicnoticeas
towhetherheelectedtobecomeornottobecomeapartnerinthefirm.Lateron,Mr.L,asupplierof
materialtoM/sABC&Co.,filedasuitagainstM/sABC&Co.forrecoveryofthedebtdue.
InthelightoftheIndianPartnershipAct,1932,explain:
(i)TowhatextentXwillbeliableifhefailedtogivepublicnoticeafterattainingmajority?
(ii)CanMr.LrecoverhisdebtfromX? [Sugg.Nov19, 6 Marks]
24. “Dissolution of a firm is different from dissolution of Partnership”. Discuss. [Sugg.Nov19, 4 Marks]

25. Statethemodesbywhichapartner maytransferhisinterestinthe firmin favourofanotherperson

undertheIndianPartnershipAct,1932.Whataretherightsofsuchatransferee?
[MTP April19, 6 Marks]
26. X,YandZarepartnersinaPartnershipFirm.Theywerecarryingtheirbusinesssuccessfullyforthepast
several years.Spouses of X and Y fought in ladies club on their personal issue and X’s wife was hurt
badly. X got angry on the incident and he convinced Z to expel Y from their partnership firm. Y was
expelled frompartnership withoutany notice from X and Z. Considering the provisions of the Indian
PartnershipAct,1932,statewhethertheycanexpelapartnerfromthefirm.Whatarethecriteriafor
testofgoodfaithinsuchcircumstances? [MTP April19, 6 Marks]
27. Whatis Partnership Deedand state theinformation containedtherein? [MTP April19, 4 Marks]
28. “Though a minor cannot be a partner in a firm, he can nonetheless be admitted to the benefits of
partnership.”
(i) ReferringtotheprovisionsoftheIndianPartnershipAct,1932,statetherightswhichcanbeen
joyedbyaminorpartner.
(ii) Statethe liabilitiesof aminorpartnerboth:
1. Before attaining majority and
2. After attaining majority. [MTP March19, 4 Marks]
29. A,B,andCarepartnersofapartnershipfirmABC&Co.Thefirmisadealerinofficefurniture.Awasin
chargeofpurchaseandsale,BwasinchargeofmaintenanceofaccountsofthefirmandCwasincharge
ofhandlingalllegalmatters.Recentlythroughanagreementamongthem,itwasdecidedthatAwillbe
inchargeofmaintenanceofaccountsandBwillbeinchargeofpurchaseandsale.Beingignorantabout
suchagreement,M,asuppliersuppliedsomefurnituretoA,whoultimatelysoldthemtoathirdparty.
ReferringtotheprovisionsofthePartnershipAct,1932,advisewhetherMcanrecovermoneyfromthe
firm.
WhatwillbeyouradviceincaseMwashavingknowledgeabouttheagreement?
[MTP March19, 6 Marks]

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30. WhendoesdissolutionofapartnershipfirmtakeplaceundertheprovisionsoftheIndianPartnership
Act,1932?Explain. [MTP MARCH19, 4 Marks]
31. Distinguish between Partnership vs. Hindu Undivided Family. Write any two points.
[MTP OCT19, 2 Marks]
32. WhataretheconsequencesofNonRegistrationofaPartnershipFirm?Discuss.
[MTP OCT19, 4 Marks]
33. Mahesh,SureshandDinesharepartnersinatradingfirm.Mahesh,withouttheknowledgeorconsent
ofSureshandDineshborrowshimselfRs.50,000fromRamesh,acustomerofthefirm,inthenameof
the firm. Mahesh, then buys some goods for his personal use with that borrowed money. Can Mr.
RameshholdMr.Suresh&Mr.Dineshliablefortheloan?ExplaintherelevantprovisionsoftheIndian
PartnershipAct,1932. [MTP OCT19, 6 Marks]
34. What is the conclusive evidence of partnership? State the circumstances when partnership is not
considered between two or more parties. [MTP OCT19, 4 Marks]
35. Statethemodesbywhichapartner maytransferhisinterestinthe firmin favourofanotherperson
undertheIndianPartnershipAct,1932.Whataretherightsofsuchatransferee?
[MTP MARCH18, 6 Marks]
36. A, Band C are partners in a firmcalled ABC Firm. A,with the intention of deceiving D, asupplier of
office stationery, buys certain stationery on behalf of the ABC Firm. The stationery is of use in the
ordinarycourseofthefirm’sbusiness.Adoesnotgivethestationerytothefirm,insteadbringsittohis
ownuse.ThesupplierD,whoisunawareoftheprivateuseofstationerybyA,claimsthepricefromthe
firm.Thefirmrefusestopayfortheprice,onthegroundthatthestationerywasneverreceivedbyit
(firm).ReferringtotheprovisionsoftheIndianPartnershipAct,1932decide:
(i) Whether the Firm’s contention shall be tenable?
(ii) WhatwouldbeyouranswerifapartofthestationerysopurchasedbyAwasdeliveredtothefirm
byhim,andtherestofthestationerywasusedbyhimforprivateuse,aboutwhichneitherthe
firmnorthesupplierDwasaware? [MTP MARCH18, 6 Marks]
37. Whatis Partnership Deedand state theinformation containedtherein?
[MTP MARCH18, 4 Marks]
38. ExplainthefollowingkindsofpartnershipundertheIndianPartnership Act,1932:
(i) Partnership at will
(ii) Particular partnership [RTPMay20]
39. “Partnerindeed virtuallyembraces thecharacter of botha principalandan agent”.Describe thesaid
statementkeepinginviewoftheprovisionsoftheIndianPartnershipAct,1932. [RTPMay20]
40. WhatarethevariousgroundsundertheIndianPartnershipAct,1932,onwhichtheCourtmay,atthe
suitofthepartner,dissolveafirm? [RTPMay20]
41. A,BandCarepartnersinafirm.Aspertermsofthepartnershipdeed,Aisentitledto20percentofthe
partnership property and profits. A retires from the firm and dies after 15 days. B and C continue
businessofthefirmwithoutsettlingaccounts.WhataretherightsofA’slegalrepresentativesagainst
thefirmundertheIndianPartnershipAct,1932? [RTPMay20]

Chapter-3 : The Indian Partnership Act, 1932 - 133 -

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 CHPTER4
THE LIMITED LIABILITY PARTNERSHIP ACT, 2008

Introduction:
• ActNotifiedbyMinistryofLawandJusticeon:9thJanuary,2007
• BillpassedinParliamenton:12 thDecember,2008
• BillassentedbyPresidenton:7thJanuary,2009
• Actcameintoforceon:31stMarch,2009
• Acthas81sectionsand4schedules.
• 1stSchedule:MutualRightsandDutiesofpartnersandwithLLP
• 2nd Schedule : Conversion of Firm into LLP
• 3rdSchedule:ConversionofPrivatecompanyintoLLP
• 4thSchedule:Conversionof Unlistedpubliccompany intoLLP

Q1 Explain the Meaning of LLP. State its Characteristics?

Ans. Meaning of LLP
• A LLPis anew formof legal businessentity withlimited liability.
• Itisan alternativecorporatebusinessvehiclethatnotonlygivesthebenefitsoflimitedliabilityatlow
compliancecostbutallowsitspartnerstheexibilityoforganisingtheirinternalstructureasatraditional
partnership.
• TheLLPisaseparatelegalentityand,whiletheLLPitselfwillbeliableforthefullextentofitsassets,
the liability of the partners willbe limited.
• SinceLLPcontainselementsofboth‘acorporatestructure’aswellas‘apartnershipfirmstructure’LLP
iscalledahybridbetweenacompanyandapartnership.
Essentials of LLP
1. LLP is a body corporate: LLPisabodycorporateformedand incorporatedunderthisActandisa
legalentityseparatefromthatofitspartners.
2. Perpetual Succession: LLP can continue its existenceirrespective ofchangesinpartners.Death,
insanity,retirementorinsolvencyofpartnershasnoimpactontheexistenceofLLP.Itiscapable
ofenteringintocontractsandholdingpropertyinitsownname.
3. Separate Legal Entity: LLP is a separate legal entity, is liable to the full extent of its assets but
liabilityof thepartnersislimitedtotheiragreed contributionintheLLP.
4. Mutual Agency: Further, no partner is liable on account of the independent or unauthorized
actions ofotherpartners.AllpartnerswillbetheagentsoftheLLPalone.Noonepartnercanbind
theotherpartnerbyhisacts.

Chapter-4 : The Limited Liability Partnership Act, 2008 - 137 -

 5. LLP Agreement: MutualrightsanddutiesofthepartnerswithinaLLParegovernedbyanagreement
betweenthepartners.TheLLPAct,2008providesexibilitytopartnertodevisetheagreementas
per their choice. In the absence of any such agreement, the mutual rights and duties shall be
governedbytheprovisionsoftheLLPAct,2008.
6. Artificial Legal Person: ALLPisanartificiallegalpersonbecauseitiscreatedbyalegalprocessand
is clothed with all rightsof anindividual. Itcan doeverythingwhich anynaturalpersoncando,
exceptofcoursethat,itcannotbesenttojail,cannottakeanoath,cannotmarryorgetdivorcenor
canitpracticealearnedprofessionlikeCAorMedicine.
7. Common Seal: ALLPbeinganartificialpersoncanactthroughitspartnersanddesignatedpartners.
LLPmayhaveacommonseal,ifitdecidestohaveone.Thus,itisnotmandatoryforaLLPtohave
acommonseal.
8. Limited Liability: EverypartnerofaLLPis,forthepurposeofthebusinessofLLP,theagentofthe
LLP, but not of other partners (Section. 26). The liability of the partners will be limited to their
agreedcontributionintheLLP
9. Management of Business: ThepartnersintheLLPareentitledtomanagethebusinessofLLP.But
only the designated partners are responsible for legal compliances.
10. Minimum and Maximum number of Partners: EveryLLPshallhave leasttwopartners andshall
also haveatleast2individualsasdesignatedpartners,ofwhomatleastoneshallberesidentin
India.ThereisnomaximumlimitonthepartnersinLLP.
11. Business for Profit Only: TheessentialrequirementforformingLLPiscarryingonalawfulbusiness
withaviewtoearnprot.ThusLLPcannotbeformedforcharitableornoneconomicpurpose.
12. Investigation: TheCentralGovernment shallhavepowerstoinvestigatetheaffairsof an LLP by
appointmentof competenceauthority forthe purpose.
13. EFilling of Documents: Every form or application of document required to be led or delivered
under theactandrulesmadethereunder,shallbeledincomputerreadableelectronicformonits
websitewww.mca.gov.inandauthenticatedbyapartnerordesignatedpartnerofLLPbytheuse
of electronic or digital signature.
Q2 What are the essential elements to incorporate LLP? Also state the steps to incorporate LLP?
Ans. UndertheLLPAct,2008,thefollowingelementsareveryessential toformaLLPinIndia:
™ To complete and submit incorporation document in the form prescribed with the Registrar
electronically
™ TohaveatleasttwopartnersforincorporationofLLP[Individualorbodycorporate]
™ Tohaveregistered office inIndia towhich all communications will be made and received
™ Toappointminimumtwoindividualsasdesignatedpartnerswhowillberesponsible for number
of duties including doing of all acts, matters and things as are required to be done by the LLP.
Atleastoneofthem should beresidentinIndia
™ ApersonornomineeofbodycorporateintendingtobeappointedasdesignatedpartnerofLLP
shouldhold a Designated Partner IdentificationNumber (DPIN) allotted by MCA

™ To execute a partnership agreement between the partners inter se or between the LLP and its
partners.IntheabsenceofanyagreementtheprovisionsassetoutinFirstScheduleofLLPAct,
2008willbeapplied
™ LLPName.TheLLPcannothavethesamenamewithanyotherLLP,PartnershipFirmorCompany
™ TocreateaLLPproperformationdocumentsmustbeledwiththeregistraralongwiththenecessary

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 filing fees.
Steps to Incorporate LLP
1. Name Resevation
™ Thefirst stepto incorporateLimited Liability Partnershipis reservation ofname ofLLP.
™ Applicanthasto fileeForm1,forascertainingavailabilityandreservation of the nameofaLLP
business.
2. Incorporate LLP
™ After reserving a name, user has to file e Form 2 for incorporating a new Limited Liability
Partnership
™ eForm2containsthedetailsofLLPproposedtobeincorporated,partners’/designatedpartners’
detailsandconsentofthepartners/designatedpartnerstoactaspartners/designatedpartners
3. LLP Agreement
™ ExecutionofLLPAgreementismandatoryasperSection23oftheAct.
™ LLPAgreementisrequiredtobefiledwiththeregistrarineForm3within30daysofincorporation
ofLLP.
Q3 State the Contents of LLP Agreement ?
Ans. Followingarethecontents of LLP Agreement
1. NameofLLP
2. Name&addressofPartners&DesignatedPartners
3. Formofcontribution&interestoncontribution
4. Profit sharing ratio
5. Remuneration of Partners
6. Rights&DutiesofPartners
7. Proposed Business
8. Rules for governing LLP.
Q4 Difference Between LLP and a Partnership Firm ?
Ans.
Basis LLP Partnership Firm
1. RegulatingAct TheLimitedLiabilityPartnershipAct, TheIndianPartnershipAct,1932.
2008
2. Bodycorporate Itisabodycorporate. Itisnotabodycorporate.
3. Separatelegalentity Itisalegalentityseparatefromits Itisagroupofpersonswithno
members. separatelegalentity.
4. Creation Itiscreatedbyalegalprocesscalled Itiscreatedbyanagreement
registrationundertheLLPAct,2008. betweenthepartners.
5. Registration Registrationismandatory.LLPcan Registrationisvoluntary.Onlythe
sueandbesuedinitsownname registeredpartnershipfirmcansue
thethirdparties.
6. Perpetualsuccession Thedeath,insanity,retirementor Thedeath, insanityRetirement

Chapter-4 : The Limited Liability Partnership Act, 2008 - 139 -

 insolvencyofthepartner(s)doesnot or insolvencyofthepartner(s)
affectitsexistenceofLLP. mayaffectitsexistence It has no
mayjoinorleavebutitsexistence perpetualsuccession.
continuesforever
7. Name NameoftheLLPtocontaintheword Noguidelines.Thepartnerscan
have
limitedliabilitypartners(LLP)suffix. as anynameaspertheirchoice.
8. Liability Liabilityofeachpartnerlimitedto Liabilityofeachpartneris
unlimited.
theextenttoagreedcontribution Itcanbeextendeduptothe
personal
exceptincaseofwillfulfraud. assetsofthepartners.
9. Mutualagency EachpartnercanbindtheLLPbyhis Eachpartnercanbindthefirmas
well
ownactsbutnottheotherpartners. asotherpartnersbyhisownacts.
10. Designatedpartners Atleasttwodesignatedpartnersand Thereisnoprovisionforsuch
partners
atleastoneofthemshallberesident undertheIndianpartnershipAct,
inIndia. 1932.
12. Legalcompliances Onlydesignatedpartnersare Allpartnersareresponsibleforall
responsibleforallthecompliances thecompliancesandpenalties
andpenaltiesunderthisAct. underthe Act.
13. Annual filingof LLPisrequiredtofile: Partnershipfirmisnotrequiredto

(i)Annualstatementofaccounts file any annual document with the

(ii)Statementofsolvency registrar of firms.
(iii)Annualreturnwiththe
registrationofLLPeveryyear.
14. Foreignpartnership Foreignnationalscanbecomea Foreignnationalscannotbecomea
partnerinaLLP. partnerinapartnershipfirm.
15. Minoraspartner Minorcannotbeadmittedtothe Minorcanbeadmittedtothe
benefits of the partnership with
thepriorconsentoftheexisting
partners.

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Q5 State the Distinction between LLP and Company?
Ans.
Basis LLP Company
1. RegulatingAct TheLLPAct,2008. TheCompaniesAct,2013.
2. Members/Partners ThepersonswhocontributetoLLP Thepersonswhoinvestthemoney
areknownaspartnersoftheLLP. inthesharesareknownas
members of the company.
3. Internalgovernance Theinternalgovernancestructure Theinternalgovernancestructure
structure ofaLLPisgovernedbyagreement ofacompanyisregulatedby
betweenthepartners. statute(i.e.,CompaniesAct,2013).
4. Name NameoftheLLPtocontaintheword Nameofthepubliccompanyto
“LimitedLiabilitypartnership”or containtheword“limited”and
“LLP”assuffix. Privatecompanytocontainthe
word “Private limited” as suffix.
5. Numberofmembers/ Minimum–2members Privatecompany:
partners Maximum–Nosuchlimitonthe Minimum–2members
membersintheAct.Themembersof Maximum–200members
theLLPcanbeindividuals/orbody
corporatethroughthenominees. Publiccompany:
Minimum–7members
Maximum–Nosuchlimitonthe
members.
Memberscanbeorganizations,
trusts,anotherbusinessformor
individuals.
6. Liabilityofmembers/ Liabilityofapartnersislimitedtothe Liabilityofamemberislimitedto
partners extentofagreedcontributionexcept theamountunpaidontheshares
incaseofwillfulfraud. heldbythem.
7. Management Thebusinessofthecompany Theaffairsofthecompanyare
managedbythepartnersincluding managedbyboardofdirectors
thedesignatedpartnersauthorized electedbytheshareholders.
intheagreement.
8. Minimumnumberof Minimum2designatedpartners. PrivateCo.–2directors
directors/designated
partners PublicCo.–3directors

Chapter-4 : The Limited Liability Partnership Act, 2008 - 141 -

Q6 Who can be partners in LLP ?
Ans. Partners (Section 5):AnyindividualorbodycorporatemaybeapartnerinaLLP.
However,anindividualshallnotbecapableofbecomingapartnerofaLLP,if—
(a) hehasbeenfoundtobeofunsoundmindbyaCourtofcompetentjurisdictionandthefindingis
in force;
(b) heisan undischargedinsolvent;or
(c) hehasappliedtobeadjudicatedasaninsolventandhisapplicationispending.
Q7 What is minimum & maximum number of partners in LLP ?
Ans. Minimum number of partners (Section 6):
(i) EveryLLPshallhaveatleasttwopartners.
(ii) IfatanytimethenumberofpartnersofaLLPisreducedbelowtwoandtheLLPcarriesonbusiness
formorethansixmonthswhilethenumberissoreduced,theperson,whoistheonlypartnerof
theLLPduringthetimethatitsocarriesonbusinessafterthosesixmonthsandhastheknowledge
ofthefactthatitiscarryingonbusinesswithhimalone,shallbeliablepersonallyfortheobligations
oftheLLPincurredduringthatperiod.
Q8 Write note on Designated Partner.
Ans. Designated partners (Section 7):
(i) EveryLLPshallhaveatleasttwodesignatedpartnerswhoareindividualsandatleastoneofthem
shallbearesidentinIndia.
(ii) IfinLLP,allthepartnersarebodiescorporateorinwhichoneormorepartnersareindividualsand
bodiescorporate,atleasttwoindividualswhoarepartnersofsuchLLPornomineesofsuchbodies
corporateshallactasdesignatedpartners.
(iii) Resident in India: For the purposes of this section, the term “resident in India” means a person
whohasstayedinIndiaforaperiodofnotlessthan182daysduringtheimmediatelypreceding
one year.
Q9 State advantages of LLP.
Ans.

isorganizedandoperatesonthebasisofanagreement.

provides exibility without imposing detailed legal and procedural requirements.

Easytoform

All partners enjoy limited liability

Flexible capital structure

Easy to dissolve

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Q10 Write a not on incorporation document.
Ans. Incorporation document (Section 11):
(1) ForaLLPtobeincorporated:
(a) two or more persons associated for carrying on alawful business with a view to profit shall
subscribetheirnamestoanincorporationdocument;
(b) theincorporationdocumentshallbeledinsuchmannerandwithsuchfees,asmaybeprescribed
withtheRegistraroftheStateinwhichtheregisteredofficeoftheLLPistobesituated;and
(c) Statement to be filed:
• there shall be filed along with the incorporation document, a statement in the prescribed
form,
• madeby eitheranadvocate, or aCompanySecretaryor aCharteredAccountantor aCost
Accountant,whoisengagedintheformationoftheLLPand
• byanyonewhosubscribedhisnametotheincorporationdocument,
• that all the requirements of thisAct and the rules made there under have been complied
with,
• inrespectofincorporation andmattersprecedentand incidentalthereto.
(2) The incorporation document shall—
(a) beinaformasmaybeprescribed;
(b) statethenameoftheLLP;
(c) statetheproposedbusinessoftheLLP;
(d) statetheaddressoftheregisteredo ceoftheLLP;
(e) state the name and address of each of the persons who are to be partners of the LLP on
incorporation;
(f) state the name and address of the personswho are to be designated partners of the LLP on
incorporation;
(g) containsuchotherinformationconcerningtheproposedLLPasmaybeprescribed.
(3) Ifapersonmakesastatementasdiscussedabovewhichhe—
(a) knowstobefalse;or
(b) doesnotbelieve to be true, shall be punishable
• withimprisonmentforaterm whichmayextendto2 yearsand
• withfinewhichshallnotbelessthan `10,000butwhichmayextendto`5Lakhs.
Q11 What is requirements of Registered office of LLP ?
Ans. Registered office of LLP and change therein (Section 13):
(1) EveryLLPshallhavearegisteredo cetowhichallcommunicaonsandnocesmaybeaddressed
and where they shall be received.
(2) AdocumentmaybeservedonaLLPorapartnerordesignatedpartnerthereofbysendingitby
post under a certificate of posting or by registered post or by any other manner, as may be
prescribed,attheregisteredofficeandanyotheraddressspecificallydeclaredbytheLLPforthe
purposeinsuchformandmannerasmaybeprescribed.

Chapter-4 : The Limited Liability Partnership Act, 2008 - 143 -

 (3) A LLP may change the place of its registered office and le the notice of such change with the
Registrarinsuchformandmannerandsubjecttosuchconditionsasmaybeprescribedandany
suchchangeshalltakeeffectonlyuponsuchfiling.
(4) IftheLLPcontravenesanyprovisionsofthissection,theLLPanditseverypartnershallbepunishable
withnewhichshallnotbelessthan`2,000butwhichmayextendto`25,000.
Q12 What is the effect of registration of LLP ?
Ans. Effect of registration (Section 14):

Q13 Write a note on name of LLP, it’s reservation and change of name of LLP ?
Ans. Name (Section 15):
(1) Everylimitedliabilitypartnershipshallhaveeitherthewords“limitedliabilitypartnership”orthe
acronym“LLP”asthelastwordsofitsname.
(2) NoLLPshallberegisteredbyanamewhich,intheopinionoftheCentralGovernmentis—
(a) undesirable; or
(b) identicalortoonearlyresemblestothatofanyotherpartnershipfirmorLLPorbodycorporate
oraregisteredtrademark,oratrademarkwhichisthesubjectmatterofanapplicationfor
registrationofanyotherpersonundertheTradeMarksAct,1999.
Reservation of name (Section 16):
(1) Apersonmayapplyinsuchformandmannerandaccompaniedbysuchfeeasmaybeprescribed
totheRegistrarforthereservationofanamesetoutintheapplicationas—
(a) thenameofaproposedLLP;or
(b) thenametowhichaLLPproposestochangeitsname.

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 (2) Upon receipt of an application under subsection (1) and on payment of the prescribed fee, the
Registrarmay,ifheis satisfied,subjecttotherulesprescribedbythe CentralGovernmentinthe
matter,thatthenametobereservedisnotonewhichmayberejectedonanygroundreferredto
in subsection (2) of section 15, reserve the name for a period of 3 months from the date of
intimation by the Registrar.
Change of name of LLP (Section 17):
(1) Notwithstanding anything contained in sections 15 and 16, where the Central Government is
satisfiedthataLLPhasbeenregistered(whetherthroughinadvertenceorotherwiseandwhether
originallyorbyachangeofname)underanamewhich—
(a) isanamereferredtoinsubsection(2)ofsection15;or
(b) is identical with or too nearly resembles the name of any other LLP or body corporate or
othernameastobelikelytobemistakenforit,theCentralGovernmentmaydirectsuchLLP
tochangeitsname,andtheLLPshallcomplywiththesaiddirectionwithin3monthsafter
thedateofthedirectionorsuchlongerperiodastheCentralGovernmentmayallow.
(2) (i)AnyLLPwhichfailstocomplywithadirectiongivenundersubsection(1)shallbepunishable
withfinewhichshallnotbelessthan`10,000butwhichmayextendto`5Lakhs.
(ii) ThedesignatedpartnerofsuchLLPshallbepunishablewithnewhichshallnotbelessthan
`10,000butwhichmayextendto`1Lakh.
Q14 Write a note on relationship of partners.
Ans. Relationship of partners (Section 23):
(1) SaveasotherwiseprovidedbythisAct,themutualrightsanddutiesofthepartnersofaLLP,and
the mutual rights and duties of a LLP and its partners, shall be governed by the LLP agreement
betweenthepartners,orbetweentheLLPanditspartners.
(2) The LLPagreement and any changes, if any, made thereinshall beled withtheRegistrar in such
form,mannerandaccompaniedbysuchfeesasmaybeprescribed.
(3) AnagreementinwritingmadebeforetheincorporationofaLLPbetweenthepersonswhosubscribe
their names to the incorporation document may impose obligations on the LLP, provided such
agreementisratifiedbyallthepartnersaftertheincorporationoftheLLP.
(4) Intheabsenceofagreementastoanymatter,themutualrightsanddutiesofthepartnersandthe
mutualrightsanddutiesoftheLLPandthepartnersshallbedeterminedbytheprovisionsrelating
tothatmatterasaresetoutintheFirstSchedule.
Q15 State provision about cessation of partnership interest ?
Ans. Cessation of partnership interest (Section 24):
(1) A person may cease to be a partner of a LLP in accordance with an agreement with the other
partnersor,intheabsenceofagreementwiththeotherpartnersastocessationofbeingapartner,
bygivinganoticeinwritingofnotlessthan30daystotheotherpartnersofhisintentiontoresign
aspartner.
(2) ApersonshallceasetobeapartnerofaLLP—
(a) onhisdeathordissolutionoftheLLP;or
(b) ifheisdeclaredtobeofunsoundmindbyacompetentcourt;or
(c) ifhehasappliedtobeadjudgedasaninsolventordeclaredasaninsolvent.
(3) WhereapersonhasceasedtobeapartnerofaLLP(hereinafterreferredtoas“formerpartner”),

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 theformerpartneristoberegarded(inrelationtoanypersondealingwiththeLLP)asstillbeing
apartneroftheLLPunless—
(a) thepersonhasnoticethattheformerpartnerhasceasedtobeapartneroftheLLP;or
(b) noticethattheformerpartnerhasceasedtobeapartneroftheLLPhasbeendelivered
totheRegistrar.
(4) ThecessationofapartnerfromtheLLPdoesnotbyitselfdischargethepartnerfromanyobligation
totheLLPortotheotherpartnersortoanyotherpersonwhichheincurredwhilebeingapartner.
(5) WhereapartnerofaLLPceasestobeapartner,unlessotherwiseprovidedintheLLPagreement,
theformerpartnerorapersonentitledtohisshareinconsequenceofthedeathorinsolvencyof
theformerpartner,shallbeentitledtoreceivefromtheLLP—
(a) anamountequaltothecapitalcontributionoftheformerpartneractuallymadetothe
LLP;and
(b) hisrighttoshareintheaccumulatedprofitsoftheLLP,afterthedeductionofaccumulated
lossesoftheLLP,determinedasatthedatetheformerpartnerceasedtobeapartner.
(6) Aformerpartnerorapersonentitledtohisshareinconsequenceofthedeathorinsolvencyofthe
formerpartnershallnothaveanyrighttointerfereinthemanagementoftheLLP.
Q16 What is requirement on registration of change in partners ?
Ans. Registration of changes in partners (Section 25):
(1) EverypartnershallinformtheLLPofanychangeinhisnameoraddresswithinaperiodof15days
ofsuchchange.
(2) ALLPshall—
(a) whereapersonbecomesorceasestobeapartner,leanoticewiththeRegistrarwithin30
daysfromthedatehebecomesorceasestobeapartner;and
(b) wherethereisanychangeinthenameoraddressofapartner,leanoticewiththeRegistrar
within30daysofsuchchange.
(3) Anoticeled withtheRegistrarunder subsection(2)—
(a) shallbeinsuchformandaccompaniedbysuchfeesasmaybeprescribed;
(b) shallbesignedbythedesignatedpartneroftheLLPandauthenticatedinamannerasmay
be prescribed; and
(c) ifitrelatestoanincomingpartner,shallcontainastatementbysuchpartnerthatheconsents
tobecomingapartner,signedbyhimandauthenticatedinthemannerasmaybeprescribed.
(4) IftheLLPcontravenestheprovisionsofsubsection(2),theLLPandeverydesignatedpartnerof
theLLPshallbepunishablewithnewhichshallnotbelessthan`2,000butwhichmayextendto
`25,000.
(5) Ifanypartnercontravenestheprovisionsofsubsection(1),suchpartnershallbepunishablewith
newhichshallnotbelessthan`2,000butwhichmayextendto`25,000.
(6) Any person who ceases to be a partner of a LLP may himself le with the Registrar the notice
referred to in subsection (3) if he has reasonable cause tobelieve that the LLP may not le the
noticewiththeRegistrarandincaseofanysuchnoticeledbyapartner,theRegistrarshallobtain
aconrmaontothise ectfromtheLLPunlesstheLLPhasalsoledsuchnoce.
However,wherenoconfirmationisgivenbytheLLPwithin15days,theregistrarshallregisterthe
noticemadebyapersonceasingtobeapartnerunderthissection.
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Q17 Explain extent of liability of LLP and partners ?
Ans. Extent of liability of LLP (Section 27):
(1) ALLPisnotboundbyanythingdonebyapartnerindealingwithapersonif—
(a) thepartnerinfacthasnoauthoritytoactfortheLLPindoingaparticularact;and
(b) thepersonknowsthathehasnoauthorityordoesnotknoworbelievehimtobeapartner
oftheLLP.
(2) TheLLPisliableifapartnerofaLLPisliabletoanypersonasaresultofawrongfulactoromission
onhispartinthecourseofthebusinessoftheLLPorwithitsauthority.
(3) AnobligationoftheLLPwhetherarisingincontractorotherwise,shallbesolelytheobligationof
theLLP.
(4) TheliabilitiesoftheLLPshallbemetoutofthepropertyoftheLLP.
Extent of liability of partner (Section 28):
(1) Apartnerisnotpersonallyliable,directlyorindirectlyforanobligationreferredtoinsubsection
(3)ofsection27solelybyreasonofbeingapartneroftheLLP.
(2) Theprovisionsofsubsection(3)ofsection27andsubsection(1)ofthissectionshallnotaffect
thepersonalliabilityofapartnerforhisownwrongfulactoromission,butapartnershallnotbe
personallyliableforthewrongfulactoromissionofanyotherpartneroftheLLP.
Q18 Write a note on partner by holding out ?
Ans. Holding out (Section 29):
(1) •Anyperson,
• whobywordsspokenorwrittenorbyconduct,
• representshimself, orknowinglypermitshimself toberepresented tobeapartnerinaLLP
• isliabletoanyperson
• whohasonthefaithofanysuchrepresentation
• given credit tothe LLP,whetherthepersonrepresenting himselforrepresented tobe apartner
doesordoesnotknowthattherepresentationhasreachedthepersonsogivingcredit.
However,
• whereanycreditisreceivedbytheLLPasaresultofsuchrepresentation,
• theLLPshall,
• without prejudice to the liability of the person so representing himself or represented to be a
partner,
• beliabletothe extent of credit receivedbyit or any financial benefitderivedthereon.
(2) Where aftera partner’s deaththebusinessis continued in the same LLPname, thecontinued use of
that name or of the deceased partner’s name as a part thereof shall not of itself make his legal
representativeorhisestateliableforanyactoftheLLPdoneafterhisdeath.
Q19 What is liability of LLP/Partner in case of Fraud ?
Ans. Unlimited liability in case of fraud (Section 30):
(1) Incaseoffraud:
• IntheeventofanactcarriedoutbyaLLP,oranyofitspartners,
• withintenttodefraudcreditorsoftheLLPoranyotherperson,orforanyfraudulentpurpose,
• the liability of the LLP and partners who acted with intent to defraud creditors or for any
fraudulent purpose
Chapter-4 : The Limited Liability Partnership Act, 2008 - 147 -
 • shallbeunlimitedforalloranyofthedebtsorotherliabilitiesoftheLLP.
However, in case anysuch act is carried out by a partner, the LLP is liable to the same extent as the
partnerunlessitisestablishedbytheLLPthatsuchactwaswithouttheknowledgeortheauthorityof
theLLP.
(2) Where any business is carried on with such intent or for such purpose as mentioned in sub
section (1), every person who was knowingly a party to the carrying on of the business in the
manner aforesaid shall be punishable with
• imprisonmentforatermwhichmayextendto2yearsand
• withfinewhichshallnotbelessthan‘50,000butwhichmayextendto‘5Lakhs.
(3) Where a LLP or any partner or designated partner or employee of such LLP has conducted the
affairs of the LLP in a fraudulent manner, then without prejudice to any criminal proceedings
which may arise under any law for the time being in force, the LLP and any such partner or
designated partner or employee shall be liable to pay compensation to any person who has
sufferedanylossordamagebyreasonofsuchconduct.
However,suchLLPshallnotbeliableifanysuchpartnerordesignatedpartneroremployeehasacted
fraudulently without knowledge of the LLP.
Q20 Write note on whistle blowing provision in LLP ?
Ans. Whistle blowing (Section 31):
(1) TheCourtorTribunalmayreduceorwaiveanypenaltyleviableagainstanypartneroremployee
ofaLLP,ifitissatisfiedthat—
• suchpartneroremployeeofaLLPhasprovidedusefulinformationduringinvestigation
ofsuchLLP;or
• when any information given by any partner or employee (whether or not during
investigation)leadstoLLPoranypartneroremployeeofsuchLLPbeingconvictedunder
thisActoranyotherAct.
(2) NopartneroremployeeofanyLLPmaybedischarged,demoted,suspended,threatened,harassed
orinanyothermannerdiscriminatedagainstthetermsandconditionsofhisLLPoremployment
merelybecause of his providing information or causing information to be provided pursuant to
subsection (1).
Q21 Write note on maintenance of A/cs and filing Annual Return by LLP ?
Ans. Maintenanceofbooksofaccount,otherrecordsandaudit,etc.(Section34):
(1) Proper Books of account:
• TheLLPshallmaintainsuchproperbooksofaccountasmaybeprescribed
• relatingtoitsaffairsforeachyearofitsexistence
• oncashbasisoraccrualbasisand
• accordingtodoubleentrysystemofaccountingand
• shall maintain thesame atits registered office
• forsuchperiodasmaybeprescribed.
(2) Statement of Account and Solvency:
• EveryLLPshall,
• withinaperiodof6monthsfromtheendofeachfinancialyear,
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 • prepareaStatementofAccountandSolvency
• forthesaidfinancialyearasatthelastdayofthesaidfinancialyear
• insuchformasmaybeprescribed,and
• suchstatementshallbe signedbythe designatedpartnersoftheLLP.
(3) Every LLP shall le within the prescribed time, the Statement of Account and Solvencyprepared
pursuanttosubsection(2)withtheRegistrareveryyearinsuchformandmannerandaccompanied
bysuchfeesasmaybeprescribed.
(4) TheaccountsofLLPshallbeauditedinaccordancewithsuchrulesasmaybeprescribed.However,
theCentralGovernmentmay,bynotificationintheOfficialGazette,exemptanyclassorclassesof
LLP fromtherequirementsof thissubsection.
(5) AnyLLPwhichfailstocomplywiththe provisionsof thissectionshallbe punishable
• withfinewhichshallnotbelessthan`25,000
• butwhichmayextendto`5Lakhs
Everydesignated partnerof suchLLPshallbe punishable
• withfinewhichshallnotbelessthan`10,000
• butwhichmayextendto`1Lakh.
Q22 Describe process of effect of conversion of Firm/company into LLP.
Ans. Conversion from firm into LLP (Section 55): A firm may convert into a LLP in accordance with the
provisions
ofthisChapter and the Second Schedule.
Conversion from private company into LLP (Section 56): AprivatecompanymayconvertintoaLLPin
accordancewiththeprovisionsofthisChapterandtheThirdSchedule.
Conversion from unlisted public company into LLP (Section 57): Anunlistedpubliccompanymayconvert
intoaLLPinaccordancewiththeprovisionsofthisChapterandtheFourthSchedule.
Registrationand effect of conversion (Section58):
Registration:
(i) TheRegistrar,onsatisfyingthatafirm,privatecompanyoranunlistedpubliccompany,asthecase
maybe,hascompliedwiththeprovisionsofthevariousSchedules,provisionsofthisActandthe
rulesmadethereunder,registerthe documentsissueacertificateof registrationinsuchform as
theRegistrarmaydeterminestatingthattheLLPis,onandfromthedatespecifiedinthecertificate,
registered under this Act.
(ii) TheLLPshall,within15daysofthedateofregistration,informtheconcernedRegistrarofFirmsor
RegistrarofCompanies,asthecasemaybe,withwhichitwasregisteredundertheprovisionsof
theIndianPartnershipAct,1932ortheCompaniesAct,1956(NowCompaniesAct,2013)asthe
casemaybe,abouttheconversionandoftheparticularsoftheLLPinsuchformandmanneras
may be prescribed.
(iii) Uponsuchconversion,thepartnersofthefirm,theshareholdersofprivatecompanyorunlisted
publiccompany,asthecasemaybe,theLLPtowhichsuchfirmorsuchcompanyhasconverted,
andthepartnersoftheLLPshallbeboundbytheprovisionsofthevariousSchedules,asthecase
maybe,applicabletothem.
(iv) Upon such conversion, on and from the date of certificate of registration, the effects of the
conversionshallbesuchasspecifiedinthevariousschedules,asthecasemaybe.

Chapter-4 : The Limited Liability Partnership Act, 2008 - 149 -

 Effect of Registration: Notwithstandinganythingcontainedinanyotherlawforthetimebeinginforce,
onandfromthedateofregistrationspecifiedinthecertificateofregistrationissuedunderthevarious
Schedule,asthecasemaybe,—
(a) thereshallbeaLLPbythe namespecifiedin thecertificateofregistrationregistered underthis
Act;
(b) alltangible (movable or immovable) andintangible property vested in the firmorthe company,
as\ the case may be, all assets, interests,rights, privileges, liabilities, obligations relating to the
firm or thecompany, asthe case may be, and the whole of the undertaking of the firm or the
company, as the case may be, shall be transferred to and shall vest in the limited liability
partnershipwithoutfurtherassurance,actordeed;and
(c) thefirmorthecompany,asthecasemaybe,shallbedeemedtobedissolvedandremovedfrom
therecordsoftheRegistrarofFirmsorRegistrarofCompanies,asthecasemaybe.
Q23 Explain circumstances of windup by Tribunal.
Ans. Circumstances in which LLP may be wound up by Tribunal (Section 64): ALLPmaybewoundupbythe
Tribunal:
(a) iftheLLPdecidesthatLLPbewoundupbytheTribunal;
(b) if,foraperiodofmorethansixmonths,thenumberofpartnersoftheLLPisreducedbelowtwo;
(c) iftheLLPisunabletopayitsdebts;
(d) iftheLLPhasactedagainsttheinterestsofthesovereigntyandintegrityofIndia,thesecurityof
theStateorpublicorder;
(e) iftheLLPhasmadeadefaultinlingwiththeRegistrartheStatementofAccountandSolvencyor
annualreturnforanyfive consecutivefinancial years; or
(f) iftheTribunalisoftheopinionthatitisjustandequitablethattheLLPbewoundup.
Q24 How provisions of Companies Act may be applied to LLP ?
Ans. ApplicationoftheprovisionsoftheCompaniesAct(Section67):
(1) TheCentralGovernmentmay,bynoticationintheOfficialGazette,directthatanyoftheprovisions
oftheCompaniesAct,1956specifiedinthenotication—
• shallapplytoanyLLP;or
• shallapplytoanyLLPwithsuchexception,modificationandadaptation,asmaybespecified,
in the notication.
(2) Acopyofeverynoticationproposedtobeissuedundersubsection(1)
• shall belaidindraftbeforeeachHouse ofParliament,whileitisinsession,
• for a total period of 30 days which may be comprised in one session or in two or more
successive sessions, and
• if, before the expiry of the session immediately following the session or the successive
sessions aforesaid, both Houses agree in disapproving the issue of the notication or both
Housesagree inmakinganymodification inthe notication,
• thenotificationshallnotbeissuedor,asthecasemaybe,
• shallbeissuedonlyinsuchmodifiedformasmaybeagreeduponbyboththeHouses.

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 CLASS WORK

THEORETICAL QUESTIONS

1. ExaminetheconceptofLLP.
2. EnumeratethevariouscharacteristicsoftheLLP.

3. State the necessities required for incorporation of the LLP.

4. WhatdoyoumeanbyDesignatedPartner?WhetheritismandatorytoappointDesignatedpartnerina
LLP?
5. WhataretheeffectsofregistrationofLLP?
6. EnumeratethecircumstancesinwhichLLPmaybewoundupbyTribunal.

HOME WORK1

1. A,aminor,andBamajor,wanttocreateaLLP.GivereasonwhetheritispossibleunderLLPAct,2008.
Ans. Hint : MinorcannotbecomeapartnerinLLP.

2. WhataretheLiabilitiesofdesignatedpartnerofLLP?
Ans. Hint :LegalCompliances.

3. StatetheadvantagesofLLP.
Ans. Hint : Combined benefitsofpartnership & Company.

Chapter-4 : The Limited Liability Partnership Act, 2008 - 151 -

 HOME WORK2

1.(i) StatetheessentialelementstoincorporateaLLP?(Topic : Incorporation of LLP)

(ii) DifferentiatebetweenaLLPandapartnershipfirm?(Topic :Difference between LLP and Partnership)
[RTPNov18]
2.(i) WhatdoyoumeanbyLimitedLiabilityPartnership(LLP)?WhataretheadvantagesforformingaLLPfor
doingbusiness??(Topic : Advantages Of LLP)
(ii) List the differences between theLimited Liability Partnership and the Limited Liability Company.
(Topic : Difference of LLP and Company) [RTPMay18]
3.(i) Statethe meaning of Limited Liability Partnership (LLP). What are the relevant steps to incorporate
LLP?
(Topic: LLP Meaning and incorporation )

(ii) Differentiate between a Limited Liability Partnership and Limited Liability Company.
(Topic : Difference of LLP and Company)
4. Explain the essential elements to incorporate a Limited Liability Partnership and the steps involved
thereinundertheLLPAct,2008. [Sugg.Nov18, 4 Marks]
5. WhataretheessentialelementstoformaLLPinIndiaaspertheLLPAct,2008?
[Sugg.May18, 5 Marks]
6. DiscusstheconditionsunderwhichLLPwillbeliableandnotliablefortheactsofthepartner.
[Sugg.Nov19, 5 Marks]
7. State the meaning of Limited Liability Partnership (LLP). What are the relevant steps to incorporate
LLP? [MTP April19, 5 Marks]
8. Differentiate between the Limited Liability Partnership (LLP) and Limited Liability Company.
[MTP MARCH19, 5 Marks]
9. WhatdoyoumeanbyDesignatedPartner?WhetheritismandatorytoappointDesignatedpartnerina
LLP? [MTP OCT19, 5 Marks]
10. State the meaning of Limited Liability Partnership (LLP). What are the relevant steps to incorporate
LLP? [MTP MARCH18, 5 Marks]
11. WhatistheprocedureforchangingthenameofLimitedLiabilityPartnership(LLP)undertheLLPAct,
2008? [RTPMay20]
12. ExplainthecircumstancesinwhichLLPmaybewoundupbyTribunalundertheLLPAct,2008.
[RTPMay20]

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 CHAPTER5
COMPANIES ACT, 2013

INTRODUCTION
 TheCompaniesAct,2013wasenactedtoconsolidateandamendthelawrelatingtothecompanies.
 TheCompaniesAct,2013contains470sectionsandsevenschedules.TheentireActhasbeendivided
into29chapters.
 AsubstantialpartofthisActisintheformofCompaniesRules.
 TheCompaniesAct,2013aimstoimprovecorporategovernance,simplifyregulations,strengthenthe
interests of minority investors and for the first time legislates the role of whistleblowers.

Q1 Describe Meaning and characteristics of company.

Ans.
 Meaning : In terms of the Companies Act, 2013 Section 2(20) : A “company” means a company
incorporated under this Act or under any previous company law.
 NATURE AND CHARACTERISTICS OF A COMPANY:
1. Corporate personality : Itisadifferent‘person’fromthememberswhocomposeit.Ashareholder
cannot be held liable for the acts of the company even if he holds virtually the entire share
capital. A member does not even have an insurable interest in the property of the company. The
leading case on this point is of Macaura v. Northern Assurance Co. Limited (1925)
2. Perpetual Succession: Membersmaydieorchange,butthecompanygoeson.Death,Unsoundness
andInsolvencyofallthemembersdonotaffecttheexistenceofcompany.
3. Limited Liability: The liability of memberswill be limited
• In case of company limited by shares: Liability will be limited till the unpaid face value of
shares
• Incaseofcompanylimitedbyguarantee:Liabilitywillbelimitedtilltheamountofguarantee
amount
• Incaseofunlimitedliabilitycompany:Inunlimitedliabilitycompanyliabilitywillbeunlimited
butonlytowardscompanynottowardsthirdparty
4. Artificial Legal Person: Acompanyisanartificialpersoncreatedbytheprocessotherthannatural
birth.Itlegalorjudicialasitiscreatedbylaw.
5. Common Seal: Commonsealistheofficialsignatureofcompanybutbyamendmentof2015now
thereisnocompulsiononcompanytohavecommonseal.

Chapter-5 : Companies Act, 2013 - 155 -

Q2 What is corporate veil and state the circumstances when this veil will be lifted.
Ans.
Meaning of Corporate veil: ThetermCorporateVeilreferstotheconceptthatmembersofacompany
are shielded from liability connected to the company’s actions. If the company incurs any debts or
contravenesanylaws,thecorporateveilconceptimpliesthatmembersshouldnotbeliableforthose
errors.
Caselaw: The case of Salomon v. Salomon and Co. Ltd.
 OnceacompanyhasbeenvalidlyconstitutedundertheCompaniesAct,itbecomesalegalperson
distinctfromitsmembersandforthispurposeitisimmaterialwhetheranymemberholdsalarge
orsmallproportionoftheshares,andwhetherheholdsthosesharesasbeneficiallyorasamere
 Lifting of Corporate Veil:
1. To determine the character of the company i.e. to find out whether coenemy or friend : Daimler
co.Ltdv/sContinentaltyre&Rubberco.Ltd.:Itwasheldthatacompanywillberegardedashaving
enemycharacterifthepersonshavingdefactocontrolofcompanyareresidentsofenemycountry
orwherevertheymaybetheyareactingoninstructionsofenemy.
2. To protect revenue/tax : Re.Dinshaw ManekjeePetit:TheassesseewasreceivingHugedividend
andinterestincomeandhecreatedthreecompaniestoreinvesttheincomeforreducingthetax
burden,thecompanieswerehavingnobusinessotherthanreceivinginvestmentandgivingback
toassesseeasapretendedloan.Itwasheldthatcompanywasnotmorethantheassessehimself
andtheassesseewasheldliabletopaythetax.
3. To avoid a legal obligation: Where it was found that the sole purpose for the formation of the
companywastouseitasadevicetoreducetheamounttobepaidbywayofbonustoworkmen,
theSupremeCourtupheldthepiercingoftheveiltolookattherealtransaction (The Workmen
Employed in Associated Rubber Industries Limited, Bhavnagar vs. The Associated Rubber Industries
Ltd., Bhavnagar and another).
4. Formation of subsidiaries to act as agents:Acompanymaysometimesberegardedasanagentor
trustee of its members, orof another company, and may therefore be deemed to have lost its
individuality in favour of its principal. Here the principal will be held liable for the acts of that
company.
5. Company formed for fraud/improper conduct or to defeat law: Wherethedeviceofincorporation
is adopted for some illegal or improper purpose, e.g., to defeat or circumvent law, to defraud
creditors or to avoid legal obligations.
Q3 Describe about Private company and public company.
Ans.
Private Company:
 Meaning: Privatecompanyisacompanywhichmaybyitsarticlesrestrictthefollowing:
• Restricttherighttotransfershares.
• Limits the number of members to 200 ( which excludes Employees/Ex employees and treating
Joint holdersas singlemember)
• Prohibits invitation to public to subscribe for anysecurities
Other Criteria:
• Itshouldhaveminimumpaidupcapitalasmaybeprescribed
• ItshouldhaveMinimum2membersandmaximum200(otherthanOPC)
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 • Itshouldhaveminimum2 directors.
Public Company:
Meaning:
• Companywhichis notprivatecompany isconsideredasPublicCompany.
• AsubsidiaryofPubliccompanyisalsoapubliccompany.
Other Criteria:
• Itshouldhaveminimumpaidupcapitalasmaybeprescribed
• Itshouldhaveminimum7membersandthereisnomaximumlimit.
• Itshouldhaveminimum3directors
Q4 Give Meaning of Holding and Subsidiary company.
Ans.
 Ifonecompanyisholding
 Eithermorethan:
¾ 50%directors(Managementcontrol)
e.g.If Bltdis having6 directorsand out ofthat morethan 50% i.e.4 ormore directors can be
appointedorremovedbythedirectionofAltdthanAltdwillbeconsideredasholdingcompany
andB ltdwill beconsidered assubsidiary.
¾ 50% voting power (Ownership control)
e.gifBltdishavingRs.10lacsasPaidupcapitalandAltd.isholdingmorethan50%ofpaidup
capitalthanAltdwillbeconsideredasholdingcompanyandBltdwillbeconsideredassubsidiary
company.
¾ Indirect holding
e.g IfA ltd is holding company ofB ltd andBltd isholdingcompany of Cltd than Altdwillby
defaultbecomeholdingcompanyofCltd
o Inothercompany
o Thenitissaidtobetheholdingcompanyofanothercompany
o Related Provision ( Associate Company):” Associate company”, in relation to another company,
means a company in which that other company has a significant influence, but which is not a
subsidiarycompanyofthecompanyhavingsuchinfluenceandincludesajointventurecompany.
Explanation provides that “significant influence” means control of at least twenty per cent. of
totalsharecapital,orofbusinessdecisionsunderanagreement.
Q5 Give meaning of Government Company.
Ans.
¾ WhereMinimum51%sharesareheldby:
• State government
• Central Government
• State and Central Government combined
• ItisknownasGovernmentCompany.
• AuditofsuchcompanywillbedonebyComptroller&AuditorGeneralofIndia.

Chapter-5 : Companies Act, 2013 - 157 -

Q6 What is meant by a Guarantee Company? State the similarities and dissimilarities between a Guarantee
Company and a Company having Share Capital.
Ans.
Meaning: The company havingtheliabilityofitsmemberslimitedbythememorandumtosuchamountas
themembersmayrespectivelyundertakebythememorandumtocontributetotheassetsofthecompany
intheeventofitsbeingwoundup.
Thus,theliabilityofthememberofaguaranteecompanyislimiteduptoastipulatedsummentionedinthe
memorandum.Memberscannot becalleduponto contribute beyond thatstipulatedsum.
Similarities and dissimilarities between the Guarantee Company and the Company having share capital:
Similarity : Thecommonfeaturesbetweena‘guaranteecompany’and‘sharecompany’arelegalpersonality
and limited liability.
Difference:Intheguaranteecompanythemembersmaybecalledupontodischargetheirliabilityonlyafter
commencement of the winding up and only subject to certain conditions; but in the company limited by
shares, they may be called upon to do so at any time, either during the company’s lifetime or during its
winding up.
Q7 Describe about Section 8 company.
Ans.
Meaning: WhenapersonoranAOPwantstoberegisteredasalimitedcompanyandit
a. Has in its objects the promotion of Commerce, Arts , Sports, Education, Research, Social welfare,
Religion, Charity,Protection of Environmentor anysuch otherobject.
b. Intendstoapplyitsprofitorotherincomeonpromotingitsobjectives
c. Intendstoprohibitthe paymentof anydividendtoitsmembers.
Characteristics, advantages and disadvantages:
 The Central Government may permit such registration as a limited company under this section.
(Section.8) without addition of words “Limited” and “Private Limited”.
 Afirmcanbeamemberofsuchcompany.
 TheMOAandAOAofthiscompanycannot bealteredwithout government’spriorapproval.
 CentralGovernmentcanalsorevokethelicensesograntedaftergivinganopportunityofbeingheard
to the company.
 Governmentcanalsopassorderofwindingupofsuchcompany.
 Governmentcanalsopassorderforamalgamationofsuchcompany.
Q8 Describe about OPC.
Ans.
Meaning:” One person company means a company which has only one person as a member.”
Provisions:
 PersonincorporatinganOPCmustbeanaturalperson,anIndianCitizenandResidentinIndia.
 MOA of this company should also include the name of a nominee who, in case of incompetence of
original member become the member of suchcompany.
 ThenomineemustalsobetheIndianCitizenaswellasResidentandmustgiveawrittenconsenttobe
thenomineefor suchOPC.

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 Â NopersonshallbeeligibletoincorporatemorethenoneOPCorbeanomineeofsuchcompany.
 Nominee’s name with the written consent should be filled with ROC.
 Nominee may withdrawhis consent at anytime by giving notice to sole member of the company. In
such a case, the sole membershall give another nomination in the same manner within 30 days of
withdrawal.
 When the sole member dies or becomes incapacitated from contracting then the nominee is sole
member,hehastonominate anothernaturalperson.
 Prohibition on Voluntary Conversion : OPCcannotgetitselfconvertedintoanyothercompanyuntil2
years of Incorporation
 Mandatory Conversion:OPCshouldconvertitselftoprivateorpublicco.inthefollowingsituations:
 WherepaidupcapitalexceedsRs.50lakhs;or
 Wheretheaverageannualturnoverforthepast3F.Y.exceedsRs.2Crores;or
 Within30days,theOPCshallgivenoticeofitsconversiontotheROC.
Q9 Describe about Doctrine of Ultravires
Ans.
Meaning:The meaning ofthe termultraviresissimply“beyond(their)powers”.
 ItisafundamentalruleofCompanyLawthattheobjectsofacompanyasstatedinitsmemorandumcan
bedepartedfromonlytotheextentpermittedbytheActthusfarandnofurther [Ashbury Railway
Company Ltd. vs. Riche]. In consequence, any act done or a contract made by the company which
travels beyond the powers not only of the directors but also of the company is wholly void and
inoperative inlaw and isthereforenotbindingon thecompany.
 The impact of the doctrine of ultra vires is that a company can neither be sued on an ultra vires
transaction, nor can it sue on it. Since the memorandum is a “public document”, it is open to public
inspection.Therefore, whenone deals witha companyone isdeemed to know aboutthe powers of
thecompany.Ifinspiteofthisyouenterintoatransactionwhichisultraviresthecompany,youcannot
enforce itagainst the company.
 The whole position regarding the doctrine of ultra vires can be summed up as:
 When an act is performed, which though legal in itself, is not authorized by the object clause of the
memorandum,orbythestatute,itissaidtobeultraviresthecompany,andhencenullandvoid.
 An act which isultravires, thecompany cannotbe ratifiedeven bythe unanimous consent ofallthe
shareholders.
 Anactwhichisultraviresthedirectors,butintraviresthecompanycanberatifiedbythemembersof
thecompanythrougharesolutionpassedatageneralmeeting.
 IfanactisultravirestheArticles,itcanberatifiedbyalteringtheArticlesbyaSpecialResolutionata
general meeting.
Q10 Describe about Doctrine of Constructive notice and indoor management.
Ans.
Doctrine of Constructive Notice:
 Thisdoctrineisinfavourofacompanyi.e.,itcreatesapresumptioninfavourofacompany.
¾ Effect Of this doctrine:
 Once registered MOA and AOA becomes the public documents. Therefore, any person dealing
withcompanyispresumedtohaveread theMemorandumandArticlescorrectly.
Chapter-5 : Companies Act, 2013 - 159 -
 Â The doctrine prevents any person dealing with a company alleging that he did not read the
provisionscontainedinMOAandAOA.
Case Law: (KotlaVenakataswarny v/s C Rammurthi)
 The Articles of a company required that all the documents and deeds of the company shall be
signedbyMD,thesecretaryandaworkingdirectorofacompany.
 Amortgagedeedwassignedbysecretaryandaworkingdirectoronly.
 Itwasheldthatthemortgagedeedwasinvalideventhoughtheplaintiffhadactedingoodfaith
and money wasutilised for benefitof the company.
Doctrine of Indoor Management
 ThisDoctrineoperatesinfavouroftheoutsiders.
Meaning:
Asperthisdoctrine,outsidersdealingwiththecompanyarenotrequiredtoenquireintotheinternal
management of the company.
Outsiders dealingwiththecompany are entitledtoassumethatasfarasinternalproceedings ofthe
company are concerned, everything has been done regularly.
 Effect: Ifacontractisenteredintoonbehalfofcompanybyanydirectororofficerofcompany,It
is enforceable against the company if provisions contained in the MOA and AOA are fulfilled ,
eventhoughwhileenteringintoacontractsomeirregularityhadarisenofwhichtheoutsiderwas
unaware.
Case law : (Royal British Bank v/s Turquand)
 Thearticlesofacompanystatedthatthedirectorscouldborrowmoneyonbehalfofacompany,
iftheyareauthorizedbyaresolutionpassedbytheshareholdersinGM.
 The directors borrowed money from T without being authorized by shareholders.
 T lentmoneyassumingthatshareholdershadauthorizedthedirectors.
 Itwasheldthatborrowingofmoneywithoutanyauthorizationwasinternalirregularityandsince
ThadnoKnowledgeofsuchirregularityhewasnotbound.
Conclusion: Thebenefit can be availed:
 IfthepersonhasknowledgeoftheMOAandAOA
 He has no knowledge of internal irregularity.
Q11 Describe the concept of shares and share capital.
Ans.
Meaning:A share represents such proportion of the interest of the shareholders as the amount paid up
thereonbearstothetotalcapitalpayable tothecompany.Itisameasureoftheinterestin thecompany’s
assetstowhichapersonholdingashareisentitled.
 Equity share capital —
Meaning: ‘Equity share capital’’, with reference toany company limited by shares, means all share
capitalwhich isnot preference sharecapital;
Types:
(1) withvotingrights;or
(2) with differential rights as to dividend,voting or otherwise in accordancewith prescribed rules;
 Preference Share capital:
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 Â Meaning: ‘Preference share capital’’, with reference to any company limited by shares,
means thatpartoftheissuedsharecapitalofthecompanywhich carriesor wouldcarrya
preferential right with respect to—
— payment of dividend, eitherasafixedamountoranamountcalculatedatafixedrate,
whichmayeitherbefreeoforsubjecttoincometax;and
— repayment,inthecaseofawindinguporrepaymentofcapital,oftheamountofthe
share capital paidup or deemed to have been paidup, whether or not, there is a
preferentialrighttothepaymentofanyfixedpremiumorpremiumonanyfixedscale,
specifiedinthememorandumorarticlesofthecompany;
Q12 Describe about the consequences where company was registered by providing false information.
Ans.
 Furnishing of false or incorrect information or suppression of material fact at the time of incorporation
(i.e. at the time of Incorporation) : If any person furnishes any false or incorrect particulars of any
informationorsuppressesanymaterialinformation,ofwhichheisawareinanyofthedocumentsled
with the Registrar in relation to the registration of a company, he shall be liable for action for fraud
undersection447.
 Company already incorporated by furnishing any false or incorrect information or representation or by
suppressing any material fact (i.e. post Incorporation): Where,atanytimeaftertheincorporationofa
company,itisprovedthatthecompanyhasbeengotincorporatedbyfurnishinganyfalseorincorrect
informationorrepresentationorbysuppressinganymaterialfactorinformationinanyofthedocuments
ordeclarationfiledormadeforincorporatingsuchcompany,orbyanyfraudulentaction,thepromoters,
thepersonsnamedasthefirstdirectorsofthecompanyandthepersonsmakingdeclarationunderthis
sectionshalleachbeliableforactionforfraudundersection447.
 Order of the Tribunal :
 Where a company has been got incorporated by furnishing false or incorrect information or
representationorbysuppressinganymaterialfactorinformationinanyofthedocumentsordeclaration
led or made for incorporating such company or by any fraudulent action, the Tribunal may, on an
applicationmadetoit,onbeingsatisfiedthatthesituationsowarrants,—
o passsuchorders,asit maythink t,forregulation ofthemanagement ofthe companyincluding
changes,ifany,initsmemorandumandarticles,inpublicinterestorintheinterestofthecompany
anditsmembersandcreditors;or
o directthat liabilityof the members shall be unlimited; or
o directremovalofthenameofthecompanyfromtheregisterofcompanies;or
o passanorderforthewindingupofthecompany;or
o passsuchotherordersasitmaydeemfit:
o Provided that before making any order,—
o thecompanyshallbegivenareasonableopportunityofbeingheardinthematter;and
o Tribunalshalltakeintoconsiderationthetransactionsenteredintobythecompany,includingthe
obligations, if any, contracted or payment of any liability.

Chapter-5 : Companies Act, 2013 - 161 -

 CLASS WORK

PRACTICAL PROBLEMS
1. Fourpersonsaretheonlymembersofaprivatecompany.Allofthemgoforapleasuretripinacarand
duetoanaccidentallthefourdie.Doestheprivatecompanyexist?(Hint:Characteristics of company)
2. Radhikawashavingahugedividendincomeandthatincomewasexemptfromtaxifitisinvestedin
othercompaniessosheformedthreecompaniesandinvestedtheincomefromdividendandinterest
into the companies which in return gave that amount as a pretended loan to Radhika. Discuss what
shouldbedoneinthiscase. (Hint:Lifting of corporate veil)

HOME WORK1
Case Studies :
(a) Describe about Incorporation Process of company.
(b) Canamembertakeinsuranceonassetsofcompanyexplainwithrelevantcase.
(Hint: Corporate personality)

HOME WORK2

1. (i) ABCPvt.Ltd.,isaPrivateCompanyhavingfivemembersonly.Allthemembersofthecompanywere
going by car to Mumbai in relation to some business. An accident took place and all of them died.
Answerwithreasons,undertheCompaniesAct,2013whetherexistenceofthecompanyhasalsocome
totheend??(Hint : Company will Exist Topic : Perpetual Succession)
(ii) DefineOPC(OnePersonCompany)andstatetherulesregardingitsmembership.Canitbeconverted
intoanonprofitcompanyunderSection8oraprivatecompany?(Topic : One Person Company)
[RTPNov18]
2. (i) Brieflyexplainthedoctrineof“ultravires”undertheCompaniesAct,2013.Whataretheconsequences
ofultraviresactsofthecompany?(Topic : Doctrine of Ultra vires)
(ii) Examinethefollowingwhethertheyarecorrectorincorrectalongwithreasons:
(a) Acompanybeinganartificialpersoncannotownpropertyandcannotsueorbesued.
(Incorrect)
(b) Aprivatelimitedcompanymusthaveaminimumoftwomembers,whileapubliclimitedcompany
musthaveatleastsevenmembers.(Correct) [RTPNov18]

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3. (i) Explaintheconceptof“DormantCompany”asenvisagedintheCompaniesAct,2013.
(Topic : Dormant Company)
(ii) The Articles of Association of XYZ Ltd. provides that Board of Directors has authority to issue bonds
providedsuchissueisauthorizedbytheshareholdersbyanecessaryresolutioninthegeneralmeeting
of the company. The company was in direneed of funds and therefore, it issued the bonds to Mr. X
withoutpassinganysuchresolutioningeneralmeeting.CanMr.Xrecoverthemoneyfromthecompany?
DecidereferringtherelevantprovisionsoftheCompaniesAct,2013.
(Hint: Yes Mr.X can recover money. Topic : Doctrine of Indoor Management) [RTPMay18]

4. (i) StatewhetheranonprofitorganizationberegisteredasacompanyundertheCompaniesAct,2013?If
so,whatproceduredoesithavetoadopt?( Topic : Section 8 Company)
(ii) When acompanyisregistered,itisclothed with alegal personality.Explain.
(Topic : Characteristics of Company) [RTPMay18]
5. Krishna, an assessee, was a wealthy man earning huge income by way of dividend and interest. He
formed three Private Companies and agreed with each to hold a bloc of investment as an agent for
them.Thedividendandinterestincome receivedbythecompanieswashandedbacktoKrishnaasa
pretendedloan.Thisway,Krishnadividedhisincomeintothreepartsinabidtoreducehistaxliability.
Decide,forwhatpurposethethreecompanieswereestablished?Whetherthelegalpersonalityofall
the three companies may be disregarded.
( Hint : Legal Personality of the companies can be disregarded. Topic: Lifting of Corporate Veil)
6.(i) TheObjectClauseofMemorandumofAssociationofABCPvt.Ltd.authorisedthecompanytocarryon
the business of trading in Fruits and Vegetables. The Directors of the company in recently concluded
BoardMeetingdecidedandaccordingly,thecompanyorderedforfishforthepurposeoftrading.FSH
LimitedsuppliedfishtoABCPvt.Ltd.worthRs.36Lakhs.Themembersofthecompanyconvenedan
extraordinary general meeting and negated the proposal of the Board of Directors on the ground of
ultra vires acts. FSH Limited being aggrieved of the said decision of ABC Pvt Ltd. seeks your advice.
Advice them.
(Hint : The contract is ultravires and void. Members’ contention is correct. Topic : Doctrine of Ultravires)
(II) FAREB Limited was incorporated byacquisition of FAREB& Co., a partnership firm, which was earlier
involvedinmanyillegalactivities.Thepromotersfurnishedsomefalseinformationandalsosuppressed
some material facts at the time of incorporation of the company. Some members of the public (not
beingdirectorsorpromotersofthecompany)approachedtheNationalCompanyLawTribunal(NCLT)
againsttheincorporationstatusofFAREBLimited.NCLTisabouttopasstheorderbydirectingthatthe
liability of the members of the company shall be unlimited.
Given the above, advice on whether the above orderwillbe legal and mention theprecaution tobe
takenbyNCLTbeforepassingorderinrespectoftheaboveaspertheprovisionsoftheCompaniesAct,
2013.
(Topic : False Particulars provided at the time of Incorporation)
 (iii) Whatisthemeaningof“CertificateofIncorporation”undertheprovisionsoftheCompaniesAct,
2013?Whataretheeffectsofregistrationofacompany?(Topic : Incorporation and Characteristics)
7. F, an assessee, was a wealthy man earning huge income by way of dividendand interest. He formed
threePrivateCompaniesandagreedwitheachtoholdablockofinvestmentasanagentforthem.The
dividend and interestincome received by thecompanieswas handed back to Fas a pretendedloan.

Chapter-5 : Companies Act, 2013 - 163 -

 This way, F divided his income into three parts in a bid to reduce his tax liability. Decide, for what
purpose the three companies were established? Whether the legal personality of all the three
companies may be disregarded.
Hint: protection of revenue: (Lifting of Corporate Veil)
8. ThepaidupShareCapitalofAVSPrivateLimitedis`1crore,consistingof8lacsEquitySharesof`10
each, fully paidup and 2 lacs Cumulative Preference Shares of ` 10 each, fully paidup. XYZ Private
LimitedandBCLPrivateLimitedareholding3lacsEquitySharesand1,50,000EquitySharesrespectively
inAVSPrivateLimited.XYZ PrivateLimitedandBCLPrivateLimitedarethesubsidiariesofTSRPrivate
Limited. With reference to the provisions of the Companies Act, 2013, examine whether AVS Private
Limited is a subsidiary of TSR Private Limited? Would your answer be different if TSRPrivateLimited
has8outoftotal10directorsontheBoardofDirectorsofAVSPrivateLimited?
Hint: Yes.InboththecasesAVSPrivateLtd.willbethesubsidiaryofTSRPrivateLtd.Totalsharecapital
ofAVSPrivateLtd.isof8,00,000SharesoutofwhichTSRPrivateLtd.isholding4,50,000sharethrough
its subsidiaries.
9. ThepaidupsharecapitalofXYZPvt.Ltd.is`20lakhsconsistingof2,00,000Equitysharesof`10each
fully paidup. ABC Pvt. Ltd. and its subsidiary DEF Pvt. Ltd. are holding 60,000 and 50,000 shares
respectively in XYZ Pvt. Ltd. Examine with reference to the provisions of the Companies Act, 2013
whetherXYZPvt.Ltd.isasubsidiaryofABCPvt.Ltd,?WouldyouranswerbedifferentifonlyDEFPvt.
Ltd.isholding1,10,000sharesinXYZPvt.Ltd.?
Hint: Yes.InboththecasesXYZPvt.Ltd.becomessubsidiaryofABCPvt.Ltd.
10. TheobjectclauseoftheMemorandumofAssociationoftheXYZ(Pvt.)Ltd.,NewDelhi,authorisedto
do trading in mangoes. The company, however, entered into partnership with Mr. A and traded in
mangoesandincurredliabilitiestoMr.A.TheCompany,subsequently,refusedtoadmittheliabilityto
‘A’onthe ground of “ultravires the Company” Advice, whether stand of the companyis legallyvalid
andifso,givereasonsinsupportofyouranswer
Hint: (Partnership is not mentioned in MOA)
11. TheArticlesofacompanyrequiredthatalldeedsetc.shouldbesignedbytheM.D.,thesecretaryand
an executive director on behalf of the company. A deed of mortgage was signed by the managing
directoronbehalfofthecompanyinfavourofZ.Canitbeavaliddeed?
Hint: TheArticlesrequirethedeedtobesignedby3persons.ZshouldhaveconsultedtheArticlesof
Associationofthecompanytoascertaintheauthorityofsigningthedeed.Evenif,theM.D.hassigned
itingoodfaith,thedeedisstillnotvalid.Zcan’tclaimonthebasisofthedeed.Theconceptisthatsince
theArticlesisapublicdocument,onbeingfiledwiththeROC,Zispresumedtohaveknownitsprovisions.
ThisprinciplewaslaidinKotlaVenkateswamix.Ramamurthy.AIR1934Mad579.
12. A company registered under section 8 or the Companies Act, 2013, earned huge profits during the
financialyearendedon31stMarch,2018duetosomefavourablepoliciesdeclaredbytheGovernment
of India and implemented by the company. Considering the development, some members of the
companywantedthecompanytodistributedividendstothemembersofthecompany.Theyapproached
youtoadvisethemaboutthemaximumamountofdividendthatcanbedeclaredbythecompanyas
pertheprovisionsoftheCompaniesAct,2013.ExaminetherelevantprovisionsoftheCompaniesAct,
2013andadvisethemembersaccordingly. [Sugg.Nov18, 4 Marks]
13. Therearecaseswherecompanylawdisregardstheprincipleofcorporatepersonalityortheprinciple
thatthecompanyisalegalentitydistinctfromitsshareholdersormembers.Elucidate.
[Sugg.Nov18, 6 Marks]

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14. Mr.Xhad purchasedsomegoodsfromM/sABCLimitedoncredit. Acreditperiodof onemonthwas
allowedtoMr.X.Beforetheduedate
Mr.Xwenttothecompanyandwantedtorepaytheamountduefromhim.HefoundonlyMr.Zthere,
whowasthefactorysupervisorofthecompany.Mr.Z toldMr.X thattheaccountantandthecashier
wereonleave,heisinchargeofreceivingmoneyandhemaypaytheamounttohim.Mr.Zissueda
moneyreceiptunderhissignature.AftertwomonthsM/sABCLimitedissuedanoticetoMr.Xfornon
payment of the dues within the stipulated period. Mr. X informed the company that he had already
cleared the dues and he is no more responsible for the same. He also contended that Mr. Z is an
employeeofthe company towhom he had madethepayment andbeingan outsider,hetrustedthe
wordsofMr.Zasdutydistributionisajoboftheinternalmanagementofthecompany.
AnalysethesituationanddecidewhetherMr.Xisfreefromhisliability. [Sugg.Nov18, 3 Marks]
15. RaviPrivateLimitedhasborrowedRs.5croresfromMudraFinanceLtd.Thisdebtisultravirestothe
company.Examine,whetherthecompanyisliabletopaythisdebt?Statetheremedyif anyavailable
toMudraFinanceLtd.? [Sugg.May18, 4 Marks]
16. DefineOPC(OnePersonCompany)andstatetherulesregardingitsmembership.Canitbeconverted
intoanonprofitcompanyunderSection8oraprivatecompany? [Sugg.May18, 6 Marks]
17. StatethelimitationsofthedoctrineofindoormanagementundertheCompaniesAct,2013.
[Sugg.May18, 3 Marks]
18. Sound Syndicate Ltd., a public company, its articles of association empowers the managing agents to
borrowbothshortandlongtermloansonbehalfofthecompany,Mr.Liddle,thedirectorofthecompany,
approachedEasyFinanceLtd.,anonbankingfinancecompanyforaloanof‘25,00,000innameofthe
company.
TheLenderagreedandprovidedtheabovesaidloan.Lateron,SoundSyndicateLtd.refusedtorepay
themoneyborrowedonthepretextthatnoresolutionauthorizingsuchloanhavebeenactuallypassed
bythecompanyandthelendershouldhaveenquiredaboutthesamepriorprovidingsuchloanhence
companynotliabletopaysuchloan.
Analyse the above situation in termsof the provisionsof Doctrine ofIndoor Management under the
CompaniesAct,2013andexaminewhetherthecontentionofSoundSyndicateLtd.iscorrectornot?
[Sugg.May19, 4 Marks]
19. What do you mean by “Companies with charitable purpose” (section 8) under the Companies Act,
2013? Mention the conditions of the issue and revocation of the licence of such company by the
government.
[Sugg.May19, 6 Marks]
20. PopularProductsLtd.iscompanyincorporatedinIndia,havingatotalShareCapitalof‘20Crores.The
Sharecapitalcomprisesof12Lakhequitysharesof‘100eachand8LakhsPreferenceSharesof‘100
each.DelightProductsLtd.andHappyProductsLtd.hold2,50,000and3,50,000sharesrespectivelyin
PopularProductsLtd.AnothercompanyCheerfulProductsLtd.holds2,50,000sharesinPopularProducts
Ltd. Jovial Ltd. is the holding company for all above three companies namely Delight Products Ltd;
HappyProductsLtd.;CheerfulProductsLtd.CanJovialLtd.betermedassubsidiarycompanyofPopular
products.Ltd.,ifit.ControlscompositionofdirectorsofPopularProductsLtd.Statetherelatedprovision
inthefavourofyouranswer. [Sugg.May19, 3 Marks]
th
21. Mr.AnilformedaOnePersonCompany(OPC)on16 April,2018formanufacturingelectriccars.The
turnoveroftheOPCforthefinancialyearended31 stMarch,2019wasaboutRs.2.25Crores.Hisfriend
Sunil wanted to invest in his OPC, so they decided to convert it voluntarily in of a private limited
company.CanAnildoso? [Sugg.Nov19, 4 Marks]

Chapter-5 : Companies Act, 2013 - 165 -

22. TheMemorandumofAssociationisacharterofacompany”.Discuss.Alsoexplaininbriefthecontents
of Memorandum ofAssociation. [Sugg.Nov19, 6 Marks]
23. A, an assessee, had large income in the form of dividend and interest. In order to reduce his tax
liability,heformedfourprivatelimitedcompanyandtransferredhisinvestmentstotheminexchange
oftheirshares.Theincomeearnedbythecompanieswastakenbackbyhimaspretendedloan.CanA
beregardedasseparatefromtheprivatelimitedcompanyheformed? [Sugg.Nov19, 3 Marks]
24. Akbar, an assessee, was a wealthy man earning huge income by way of dividend and interest. He
formed three Private Companies and agreed with each to hold a bloc of investment as an agent for
them. The dividend and interest income received by the companies was handed back to Akbar as a
pretendedloan.Thisway,Akbardividedhisincomeintothreepartsinabidtoreducehistaxliability.
Decide,forwhatpurposethethreecompanieswereestablished?Whetherthelegalpersonalityofall
the three companies may be disregarded. [MTP April19, 4 Marks]
25. Explain the meaning of Guarantee Company? State the similarities and dissimilarities between a
Guarantee Company’ and ‘Company Limited by Shares’. [MTP April19, 6 Marks]
26. Examinewithreasonswhetherthefollowingstatementiscorrectorincorrect:
(i) Aprivatelimitedcompanymusthaveaminimumoftwomembers,whileapubliclimitedcompany
musthaveatleastsevenmembers.
(ii) Affixing of Common seal on company’s documents is compulsory. [MTP April19, 3 Marks]
27. Mr.Xhad purchasedsomegoods fromM/sABCLimitedoncredit. Acreditperiodof onemonthwas
allowedtoMr.X.BeforetheduedateMr.Xwenttothecompanyandwantedtorepaytheamountdue
fromhim.HefoundonlyMr.Zthere,whowasthefactorysupervisorofthecompany.
Mr.ZtoldMr.Xthattheaccountantandthecashierwereonleave,heisinchargeofreceivingmoney
andhemaypaytheamounttohim.Mr.Zissuedamoneyreceiptunderhissignature.Aftertwomonths
M/sABCLimitedissuedanoticetoMr.Xfornonpaymentofthedueswithinthestipulatedperiod.Mr.
Xinformedthecompanythathehadalreadyclearedtheduesandheisnomoreresponsibleforthe
same.HealsocontendedthatMr.Zisanemployeeofthecompanywhomhehadmadethepayment
and being an outsider, he trusted the words of Mr. Z as duty distribution is a job of the internal
management of the company.
AnalysethesituationanddecidewhetherMr.Xisfreefromhisliability. [MTP MARCH19, 4 Marks]
28. F, an assessee, was a wealthy man earning huge income by way of dividendand interest. He formed
threePrivateCompaniesandagreedwitheachtoholdablocofinvestmentasanagentforthem.The
dividend and interestincome received by thecompanieswas handed back to Fas a pretendedloan.
Thisway,Fdividedhis incomeintothreepartsinabidtoreducehistaxliability.
Decide,forwhatpurposethethreecompanieswereestablished?Whetherthelegalpersonalityofall
the three companies may be disregarded. [MTP MARCH19, 6 Marks]
29. Flora Fauna Limited was registered as a public company. There are 230 members in the company as
noted below:
The Board of Directors of the company propose to convert it into a private company. Also advise
whether reduction in thenumber of members is necessary. [MTP MARCH19, 3 Marks]
(a) Directors and their relatives 190
(b) Employees 15
(c) ExEmployees (Shares were allotted when they were employees 10
(d) 5couplesholdingsharesjointlyinthenameofhusbandandwife(5*2) 10
(e) Others 5

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30. A company registered under section 8 of the Companies Act, 2013, earned huge profit during the
financialyearendedon31stMarch,2019duetosomefavorablepoliciesdeclaredbytheGovernment
of India and implemented by the company. Considering the development, some members of the
companywantedthecompanytodistributedividendstothemembersofthecompany.Theyapproached
youtoadvisethemaboutthemaximumamountofdividendthatcan be declared by the company as
pertheprovisionsoftheCompaniesAct,2013. [MTP OCT19, 4 Marks]
31. DefineOPC(OnePersonCompany)andstatetherulesregardingitsmembership.Canitbeconverted
intoanonprofitcompanyunderSection8oraprivatecompany? [MTP OCT19, 6 Marks]
32. Mr.XhadpurchasedsomegoodsfromM/sABCLimitedoncredit.Acreditperiodofonemonthwas
allowedtoMr.X.BeforetheduedateMr.Xwenttothecompanyandwantedtorepaytheamountdue
fromhim.HefoundonlyMr.Zthere,whowasthefactorysupervisorofthecompany.
Mr.ZtoldMr.Xthattheaccountantandthecashierwereonleave,heisinchargeofreceivingmoney
andhemaypaytheamounttohim.Mr.Zissuedamoneyreceiptunderhissignature.Aftertwomonths
M/sABCLimitedissuedanoticetoMr.Xfornonpaymentofthedueswithinthestipulatedperiod.Mr.
Xinformedthecompanythathehadalreadyclearedtheduesandheisnomoreresponsibleforthe
same.HealsocontendedthatMr.Zisanemployeeofthecompanytowhomhehadmadethepayment
and being an outsider, he trusted the words of Mr. Z as duty distribution is a job of the internal
management of the company.
AnalysethesituationanddecidewhetherMr.Xisfreefromhisliability. [MTP OCT19, 3 Marks]
33. Krishna,anassessee,wasawealthymanearninghugeincomebywayofdividendandinterest.
HeformedthreePrivateCompaniesandagreedwitheachtoholdablocofinvestmentasanagentfor
them.Thedividendandinterestincome receivedbythecompanieswashandedbacktoKrishnaasa
pretendedloan.Thisway,Krishnadividedhisincomeintothreepartsinabidtoreducehistaxliability.
Decide,forwhatpurposethethreecompanieswereestablished?Whetherthelegalpersonalityofall
the three companies may be disregarded. [MTP MARCH18, 4 Marks]
34. Explain the meaning of Guarantee Company? State the similarities and dissimilarities between a
‘Guarantee Company’ and ‘Company Limited by Shares’. [MTP MARCH18, 6 Marks]
35. Examinewithreasonswhetherthefollowingstatementiscorrectorincorrect:
(i) Aprivatelimitedcompanymusthaveaminimumoftwomembers,whileapubliclimitedcompany
musthaveatleastsevenmembers.
(ii) Affixing of Common seal on company’s documents is compulsory. [MTP MARCH18, 3 Marks]
36. Naveen incorporated a “One Person Company” making his sister Navita as the nominee. Navita is
leavingIndiapermanentlyduetohermarriageabroad.Duetothisfact,sheiswithdrawingherconsent
of nomination in the said One Person Company. Taking into considerations the provisions of the
CompaniesAct, 2013answerthequestionsgiven below. [RTPMay20]
(a) IfNavitais leavingIndiapermanently,isitmandatoryforhertowithdrawher nominationinthe
said One Person Company?
(b) IfNavitamaintainedthestatusofResidentofIndiaafterhermarriage,thencanshecontinueher
nominationin thesaid OnePerson Company?
37. Examinethefollowingwhethertheyarecorrectorincorrectalongwithreasons: [RTPMay20]
(a) Acompanybeinganartificialpersoncannotownpropertyandcannotsueorbesued.
(b) Aprivatelimitedcompanymusthaveaminimumoftwomembers,whileapubliclimitedcompany
musthaveatleastsevenmembers.
38. Brieflyexplainthedoctrineof“ultravires”undertheCompaniesAct,2013.Whataretheconsequences
ofultraviresactsofthecompany? [RTPMay20]
‰

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 BUSINESS CORRE-
SPONDENCE AND
REPORTING
(PART2)

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 CHAPTER1
COMMUNICATION

INTRODUCTION
“Communication (from Latin communicate, meaning “to share”) is a process of exchanging information,
ideas, thoughts, feelings and emotions through speech, signals, writing, or behavior.

Incommunicationprocess,asender(encoder)encodesamessageandthenusingamedium/channelsends
it to the receiver (decoder) who decodes the message and after processing information, sends back
appropriate feedback/ reply using a medium/channel.”

Q1 Whatdoyoumeanbycommunication?
Ans.
 Theword“Communication”hasbeenderivedfromaLatinwordcommunicate,meaning“toshare”.
 It is a process of exchanging information, ideas, thoughts, feelings and emotions through speech,
signals, writing or behavior.
 Incommunicationprocess,asender(encoder)encodesamessageandthenusingamedium/channel
sends it to the receiver (decoder) who decodes the message and after processing information sends
back appropriate feedback/ reply using a medium/channel.” (Source: ggu.ac.in)
Q2 ExaminetheStepsinCommunication:
Themainstepsinherenttoallcommunicationare:
1. Thepurposeorreasonforthecommunication.
2. Thecontentsofthemessage.
3. The medium used for conveying the message. (For example, internet, written text, speech,
pictures, gesturesandsoon).
4. Transmitting the message.
5. Messagesareoftenmisinterpretedduetoexternaldisturbancessuchasnoisecreatedbyhumans,
trafficandnaturalforces.Thesefactorscanresultinmiscommunication.
6. Receiving the message.
7. Deciphering and making sense of the message.Decode.
8. Interpreting and figuringoutwhatthereceiverthinksis the realmessage.

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Q3 Explainthetypesofcommunication:
Understanding different types of communication can be of great use. A good understanding of the
differenttypesandstylesofcommunicationcanenhanceyourpersonalandprofessionalrelationships,
resolve any misunderstandings and misconceptions and contribute to a successful business venture
and a joyful personal life.
TheBroadCategoriesofCommunicationare:
1. Verbal:Itinvolvestheuseofwordsandlanguageindeliveringtheintendedmessage.Though‘verbal’
primarilyreferstocommunicationthroughthespokenmedium,whilecategorizing‘types’ofverbal
communicationthewrittenandoralformofcommunicationareincluded.
 Writtencommunicationincludeslettersanddocuments,emails,reports,handbooks,brochures,
various chatplatforms, SMS and any form of written interaction between people. The written
formofcommunicationisessentialandindispensableforformalbusinessinteractions(contracts,
memos,pressreleases,formalbusinessproposalsetc.)andlegalinstructionsanddocumentation.
The effectiveness of written communication depends on the writing style, grammar, vocabulary,
andclarity.
 Oral Communication refers to communication through the spoken word, either facetoface,
telephonically, viavoice chat, video conferencing or any other medium. Formal medium like
lectures, conferences, seminars, meetings and informal conversations, chitchat, gossip etc are
partoforal communications.Effectivenessof oral communicationdependsonclear speechand
thetoneusedbythespeaker.Speakingintoohigh/lowvolumeortoofast/slowcanalsoimpair
communication between people. Even nonverbal communications such as body language and
visualcuesaffectthequalityofinteraction amongindividualsor group.

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 Verbal communication is the easiest, fastest, and the most successful form of communication. Yet,
surprisinglyaccordingtoresearch,itcomprisesofonlysevenpercentofallhumancommunication!
2. NonverbalCommunication:Nonverbalcommunicationisthepracticeofsendingandreceivingwordless
messages.Thesemessagescanhelpverbalcommunication,conveythoughtsandfeelingscontrary to
the spoken words or express ideasand emotions on theirown. Some of the functions of nonverbal
communication in humans are to complement and illustrate, to reinforce and emphasize, to replace
andsubstitute,tocontrolandregulate,andtocontradictthedenotedmessage.
 Physical nonverbal communication: An individual’s body language that is, facial expressions,
stance, gestures, tone of voice, touch, and other physical signals constitute this type of
communication. For example, leaning forward may mean friendliness, acceptance and interest,
whilecrossingarmscanbe interpretedasantagonisticordefensiveposture.
Research estimates   that physical, nonverbal communication accounts for 55 percent of all
communication.Smiles,frowns,pursingoflips,clenchingofhandsetc.transmitemotionswhich
are not expressed through verbal communication.
 Paralanguage:Thewayyousaysomething,morethantheactualwordsused,revealtheintentof
the message, The voice quality, intonation,  pitch, stress, emotion, tone, and style of speaking,
communicates approval, interest or the lack of it. Research estimates that tone of the voice
accountsfor38percentofallcommunications.
 Aestheticcommunication:Artformssuchasdancing,painting,sculptor,musicarealsomeansof
communication.Theydistinctlyconveytheideasandthoughtsoftheartist.
 Appearance: Appearanceisusually thefirst thingnoticedaboutaperson.Awelldressedand
groomedpersonispresumedtobeorganizedandmethodical,whereasasloppyorshabbyperson
fails tomakeafavorableimpression.Therefore, dressingappropriatelyinallformalinteractions
is emphasized.
The dress code in office is generally formal. It constitutes of formal suits, trousers with plain
white or light colored shirts and leather shoes.  Bright colours, jeans, T shirts, especially with
slogansandotherinformalweararefrownedupon.Forwomenformaltwopiecetrouserorskirt
setsorformal ethnicwearlikesarees, ispermissible.
 Symbols such as religious, status, or egobuilding symbols
3. Visual Communication:  Visual  communication through  visual aids such  as signs,  typography,
drawing,graphicdesign,illustration,colorandotherelectronicresourcesusuallyreinforceswritten
communication. Sometimes,it mayreplace written communication altogether. Visual communication
is powerful medium. It is the reason that the print and audiovisual media makes effective use of
visualsto conveytheir message.Visuals likegraphs,piechartsandother diagrammatic presentations
convey clearly and concisely a great deal of information. They are an essential part of official
presentations these days.
Q4 ExplainFormal&InformalCommunication.
 Wellstructuredformalcommunicationchannelsneedtobeestablishedineveryorganizationfor
its success.
 Informalchannelsofcommunicationareequallyimportantforthesuccessofthecompany.Most
verbalcommunicationsbetweenfriends,familyandcommunityareinformalandcasualinnature.
1. Formalcommunication:Formalcommunication,bothoralandwritten,followscertainrules,principles
and conventions in conveying the message. The hierarchy in the organization has to be followed.
Formalformat,styleandlanguagehavetobeused.Thecommunicationpatterncanbevertical,horizontal
or diagonal.

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 Â Vertical: Information canflow upwards or downwards inthe organization.Data thatis collected
flowsuptothetoplevelsofmanagementforreviewanddecisionmaking,whileinstructionsand
ordersarepasseddownfromthemanagement/seniorstothesubordinatesforimplementation.
 Horizontal: Horizontal communicationthat involves communication between two parts of the
organizationatthesamelevel.Forexample,themanagersofaprojectinacompanymayholda
regulardaily,weeklyor monthlymeetingtodiscussthe progressof theproject.
 Diagonal:Crossfunctionalcommunicationbetweenemployeesat differentlevelsofthe
organizational hierarchy  isdescribed  asdiagonal  communication.Diagonal communication is
increasingly common in larger organizations. It reduces the chances of distortion or
misinterpretation by encouraging direct communication between the relevant parties. For
example,ajuniorengineerreportsdirectlytotheGeneralManagerregardingtheprogressonthe
project.
2. Informalcommunication:InformalCommunicationiscasual,friendlyandunofficial.Itisspontaneous
conversation and exchange of information between twoor morepersons without conforming to the
prescribed official rules, processes, systems, formalities and chain of command.
Informalcommunicationisbetweenfamily,friends,neighbors,membersofthecommunityandother
social relations that are based on common interests, tastes and dispositions. Information can flow
from any source in any direction. Employeesin an organization interact with each other outside the
formaldomain..Suchcommunicationiscalled‘grapevine’gossipintheoffice.Employeesofdifferent
departmentsandvariedlevelsmeetanddiscussmatterscasuallyandinformally.Thegrapevinesatisfies
thesocialneedsofthepeopleandhelpsinbuildingrelationships.Itisalsousefulinaddressingcertain
needs and grievances of employees.
Q5 Explainvariousnetworksincommunication:
Acommunicationnetworkreferstothemethodandpatternusedbymembersofanorganizationto
passon information toother employees in the organization.
Networkhelpsmanagerscreatevarioustypesofcommunicationflowsaccordingtorequirementofthe
task at hand. Some companies have established and predefined  networks of communication for
specified venture.
Thestructureofcommunicationwithinacompanydependsuponthesizeoftheorganization,typeof
communicationchannelsintheorganizationandthenumberofpersonsinvolvedintheprocess.There
canbemanypatternsofcommunicationnetwork.
Themostcommonnetworksfollowedinorganizationsarethefollowing:
1. VerticalNetwork:Theverticalnetworkisaformalnetwork.Itisusuallybetweenahigherranking
employee and a subordinate. In this twoway communication, immediate feedbackis possible.

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 2. CircuitNetwork: Whentwopersonscommunicatewitheachothersendingmessagesand
feedback,they form acommunicationcircuit. Thereforeitisknown ascircuitnetwork.Thetwo
people interactingcan becolleaguesplaced atthesame hierarchicallevel inthe organization.

3. ChainNetwork:Thecommunicationpatternthatfollowsthechainofcommandfromtheseniortothe
junioriscalledthechainnetwork.Communicationstartsatthetop,likefromaCEO,andworksitsway
down to the different levels of employees. The supervisor/ manager/ CEO gives commands or
instructionstothoseworkingunderhim/herintheorganization.B,C,DandE,F,Garethesubordinates

Chapter-1 : Communication - 177 -

 toAintheorganizationalhierarchyandreceivecommandsfrom‘A’asshowninthediagram.Thechain
networkoftentakesuptime,andcommunicationmaynotbeclear.

4. Wheel & Spoke Network : This is an organization where there is a single controlling authority who
gives instructions and orders to allemployeesworkingunder him/her.All employeesget instructions
directly from the leader and report back to him/her. It is direct and efficient for a small business/
company,butinappropriatewayofcommunicationinalargeorganizationwithmanypeople.Acompany
withmanyemployeesneedsmoredecisionmakersornothingwouldgetdone.Canalargeconglomerate
like Reliance or Tata Sons have one person making decisions? Moreover, if the central figure is not
competent, the entire businesse will suffer.

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 5. StarNetwork:Thestarcommunicationnetworkhasmultiplechannelsofcommunicationopenbetween
all members. This network propagates group communication and is essential where teamwork is
involved. The members communicate and exchange information with each other freely, and without
hindrance or hesitation.

Theusefulnessofallnetworksdependsonthestructureandsizeofthecompany,and themannerof
communicationbetweentheemployees.Goodcommunicationreliesonthesincerityoftheemployees
withinthecompanyaswellasproperlydefinedprocessesintheorganization.Theseparametershelp
the organization achieve its objectives.
Q6 Explainthecharacteristicsofeffectivecommunication.
Severalaspectsmustbekeptinmindwhileinteractingwithothersforourcommunication toconvey
the intended message.
1. Clear: Any spoken or written communication should state the purpose of message clearly. The
language should be simple. Sentences ought to be short as the core message is lost in long,
complicated sentences. Each idea or point must be explained in a separate bulleted points or
paragraphs.Makeiteasyforthereadertograsptheintentofthecommunique.
2. Concise: Brevity is the essence of business communication. No one has the time to read long
drawn out essays. Besides, the core content is lost in elaborate details. Avoid using too many
irrelevantwords or adjectives,forexample,‘yousee’, ‘Imean tosay’,etc.Ensurethatthere are
no repetitions.
3. Concrete: The content of your communique should be tangible. Base it on facts and figures.
Abstractideasandthoughtsareliabletomisinterpretation.Makesurethatthereisjustsufficient
detailtosupportyourcase/argumentandbringfocustothemainmessage.
4. Coherent:Coherenceinwritingandspeechreferstothelogicalbridgebetweenwords,sentences,
and paragraphs. Main ideas and meaning can be difficult for the reader to follow if the writer
jumps from one idea to another and uses contradictory words to express himself. The key to
coherence is sequentially organized and logically presented information which is easily
understood. All content under the topic should be relevant, interconnected and present
information in a flow.
5. Complete:Acompletecommunicationconveysallfactsandinformationrequiredbytherecipient.
It keeps in mind the receiver’s intellect and attitude and conveys the message accordingly. A
complete communication helps in building the company’s reputation, aids in better decision
making as all relevant and required information is available with the receiver.

Chapter-1 : Communication - 179 -

 6. Courteous: Courtesy implies that the sender is polite, considerate, respectful, open and honest
withthereceiver.Thesenderofthemessagetakesintoconsiderationtheviewpointsandfeelings
of the receiver of the message. Make sure nothing offensive or with hidden negative tone is
included.
7. ListeningforUnderstanding:Wearebombardedbynoiseandsoundinallourwakinghours.We
‘hear’conversations,news,gossipandmanyotherformsofspeechallthetime.However,most
of it is not listened to carefully and therefore, not understood, partially understood or
misunderstood.Agoodlistenerdoesnotonlylistentothespokenwords,butobservescarefully
the nonverbal cues to understand the complete message. He absorbs the given information,
processes it, and understands its context and meaning so as to form an accurate, reasoned,
intelligent response.
Thelistenerhastobeobjective,practicalandincontrolofhisemotions.Oftentheunderstanding
ofalisteneriscoloredbyhisownemotions,judgments,opinions,andreactionstowhatisbeing
said.Whilelisteningforunderstanding,wefocusontheindividualandhisagenda.Aperceptive
listenerisabletosatisfyacustomerandsuggestsolutionsaspertheneedsoftheclient.
8. FocusandAttention:Everydayworkenvironmenthasmultipleactivitiesgoingonsimultaneously.
The ringing of the phone, an incoming email, or a number of tasks requiring your attention,
anxietyrelatedtowork,emotionaldistressetc.candistractyou.Suchdistractionsaredetrimental
to the communication process with an individual or a group of people. You may overlook or
completelymissimportantpointsorcuesintheinteraction.Thus,keepingyourfocusandattention
during the communique is imperative for effective communication.
9. Emotional Awareness and Control:  Emotions play a major role in our interactions with other
people.Theyareapowerfulforcethataffectsourperceptionofrealityregardlessofhowhardwe
try to be unbiased. In fact, intense emotions can undermine a person’s capacity for rational
decisionmaking, even when the individual is aware of the need to make careful decisions.
Consequently, emotional awareness is a necessary element of good communication. While
interactingwith anotherpersonoragroup,itisimportantto understandtheemotionsyouand
he/she/they are bringing to the discussion. Managing your own and others emotions and
communicating keeping in mind the emotional state of others helps in smooth interaction and
breakdown of the communication process.
Q7 ExaminevariousbarrierstoCommunication.
There are multiple barriers in the communication process. These barriers result in distortion and
misunderstandingoftheintendedcommunique.Thebarrierscanbephysical,psychological,emotional,
cultural, linguistic etceter
1. Physicalbarriers:Thesearearesultofoursurroundings.Noise,technicaldisturbances,outdated
equipment,distantlocations,officedoors,separateareasforpeopleofdifferentareas,large
office spaces, old technology and lack of appropriate infrastructure  can lead to problems in
transmission of message.
2. Organizationalstructurebarriers:Communicationproblemsoccurwhenthesystems,structures
andprocessesintheorganizationarenotclearorhavegapsinthem.Ifthechainofcommandis
unclear,apersonmaynotknowwhomtocontactforaparticularissue.Inappropriateinformation
transmission systems,lackofsupervision,andunclearrole and responsibility demarcationslead
to confusion and inefficiency.
3. Languagebarriers:Languagecancreatemanyobstaclesincommunication.Literally,peoplefrom
differentregionsandcountriesmayinterpretthesamewordsdifferently.Difficultwords,subject
specific terminology, unfamiliar expressions and ambiguous words having multiple meanings,
createhurdlesincommunicating.Itisalsoafactthatthelinguisticabilityofvariouspeopleinthe
work place is different. Some maybe proficient in the language while others may possess just

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 basic skills. Therefore, it is importanttouse clear, simple easily understoodlanguage in most of
your official communications.
4. Culturalbarriers:Understandingcultural aspects of communication referstohavingknowledgeof
different cultures in order to communicate effectively with cross culture people. Understanding
various cultures in this era of globalization isan absolute necessity as the existence of cultural
differences between people from various countries, regions tribes and, religions, where words
and symbols may be interpreted differently can result in communication barriers and
miscommunications.Multinationalcompaniesofferspecialcoursesanddocumentstofamiliarize
their staff with the culture of the country where they are based for work. In addition, every
organization too has its own work culture. In fact, departments within the same company may
alsodifferintheirexpectations,normsandideologies.Thiscanimpactintraandinterorganizational
communication.
The same principle applies to families and family groups, where people have different
expectationsaccordingtotheirbackgroundandtraditionsleadingtofrictionandmisunderstanding.
Averysimpleexampleisofthewayfoodisservedbyamemberofafamily.Itcanbethecauseof
appreciation or displeasure.
5. Emotionalbarriers:Oneofthechiefbarrierstoopenandfreecommunicationsistheemotional
barrier. Anger, fear of criticism or ridicule, mistrust of person, suspicion of intentions, jealousy,
anxiety and many more feelings and sentiments we carry within us, affect our communication
ability and quality. A person who is upset and disturbed cannot pass on or receive information
appropriately and objectively. His emotions will color his perception and assessment of the
communication.
6. Attitude barriers Personal attitudes of employees can affect communication within the
organization.
Aproactive,motivatedworkerwillfacilitatethecommunicationprocess,whereasadissatisfied,
disgruntled,shy,introvertorlazyemployeecandelay,hesitateintakingtheinitiative,orrefuse
tocommunicate.Attitudeproblemscanbeaddressedbygoodmanagementandregularinteraction
with staff members.
7. PerceptionBarriers Eachone ofusperceivestheworld differentlyandthiscausesproblems in
communicating.Thesamecontentisseenandinterpreteddifferentlybytwopeopleandtherein
lies the root cause of miscommunications and misunderstandings.
8. Physiological barriers Illhealth, poor eyesight, hearing difficulties or any other physiological
problems can be hurdles in effective interaction with others.
9. Technology barriers– In today’s world, communication modes are primarily technology driven.
This communication technology is being constantly upgraded or new formats emerge ever so
frequently.Anyonewhoisnottechfriendlystrugglestocommunicateeffectivelyviathemedium.
Moreover, an individual is faced with a huge amount of information every day in the form of
emails, textsand social updates.Multitasking is the normthese days. The information overload
and trying to accomplish too many things together can result in gaps in communication and
miscommunications.
10. GenderbarriersMenandwomencommunicatedifferently.Thereasonforthisliesinthewiring
ofaman’sandwoman’sbrains.Mentalkinalinear,logicalandcompartmentalizedmannerwhereas
the women use both logic and emotion, and are more verbose. This may be the cause of
communicationprobleminanofficewherebothmenandwomenworksidebyside.Mencanbe
heldguiltyofproviding insufficient information,whilewomen may be blamed for providingtoo
muchdetail.Genderbiasisanotherfactorincommunicationbarriers.Duetotraditionalmindsets,
manymenfinditdifficulttotakeordersfrom,orprovideinformationtowomen.

Chapter-1 : Communication - 181 -

 CLASSWORK

Q1 Statethetypesofcommunicationchannelsusedbyhumans.Explaineachinacoupleofsentences?
Q2 Whataremainstepsinprocessofcommunication?
Q3 Mentionthenetworksusedincommunication.Whichisthemosteffectiveforteamworkandwhy?
Q4 Whatarethedisadvantagesofthewheelnetwork?
Q5 According to you which are five most important characteristics of effective communication? Give
reasonsforyouranswer.
Q6 What are barriers in communication? In an organization which barrier, according to you, impedes
communication the most?
Q7 Howdoculturalbarriersaffectcommunication?Explainwithexamplesofyourown.

HOMEWORK1

Q1 Write definition and meaning of Communication

Q2 What are the categories of Communication? (Types of Communication)
Q3 Write about the differences between formal and informal Communication.

HOMEWORK2

Q1 (i)Definetheterm‘communication’.Howisitrelevantindailylife? [Sugg.Nov18,2Marks]

(ii) Describe the term “paralanguage’, a mode of communication.
(iii) Discuss “Cultural barrier in communication.
(iv) Whatdoyoumeanby(A)Verticaland(B)Horizontalformalcommunication?
(v) How do Technology barriers effects communication? Explain.
(vi) Nonverbalisalso oneoftheBroadCategories ofCommunication?Explain.
Q2 (i)DefineVertical&ChainNetworkundernetworkincommunication? [Sugg.May19,2marks]
(ii) Discussthe“Gender Barrier” in communication.
(iii) WhatdoyoumeanbyInformalCommunication?
(iv) “The listener has to be objective, practical and control his emotions” Explain with reference to
importance of listening in communication?
(v) Define theimportance ofPara language in Non VerbalCommunication.

Q3 (i)Definevisualcommunication. [Sugg.May18,2marks]

(ii) Write any fourbarriers to effectivecommunication? [Sugg.May18,2marks]
(iii) Whatarethe characteristics of effectivecommunication?
(iv) Whatisdiagonalcommunication?
(v) Whatarethemainstepsintheprocessofcommunication?

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Q4 (i)Disqusstheprocessofcommunication. [Sugg.Nov19,2marks]
(ii) Discuss the term “Visual Communication” in communication.
(iii) Whatdoyoumeanbyan“AttitudeBarrier”?
(iv) Explain how emotional awareness and controlhelps in communication?
(v) Definetheareaswherechainnetworkofcommunicationisfoundinan organization.
Q5 (i)Whatisvisualcommunication? [MTPApril19,1Mark]
(ii) Whatisnetworkincommunication.
(iii) Explain briefly the characteristics of effective communication.
(iv) What/Which according to you is/are the most significant communication barrier/s that should
beeliminated for a seamless communication in a diverse/multicultural work environment?

Q6 (i)  Explain briefly cultural barriers in communication. [MTPMarch19,1Mark]

(ii) Whatisnonverbalcommunication.Explainits types.
(iii) Defineformal communication and explain its types

Q7 (i)Whatarethebarriersofcommunication?Explainit. [MTPOct19,1Mark]

(ii) Differentiate between the Horizontal and Diagonal Communication?
(iii) Comparewrittenandoralcommunicationinyour ownlanguage?
(iv) Whatarethe characteristics of effectivecommunication?

Q8 (i) Define the term ‘communication’. How is it relevant in daily life? [MTPAug19,2Marks]
(ii) Whatisthe‘chainofcommand’incommunication?
(iii) Listatleast5barriersofcommunication.Explainanytwooftheminyourownwords.
(iv) Based on communication channels, what are the different kinds of communication methods?
Explain.

Q9 (i)Whatarethelanguagebarriersincommunication? [RTPMay20]

(ii) How nonverbal communication is impactful in communication?

Chapter-1 : Communication - 183 -

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 CHAPTER2
SENTENCETYPESACTIVEPASSIVEVOICEDIRECT
INDIRECTSPEECH

INTRODUCTION
Theterm"grammar"canalsobeusedtodescribetherulesthatgovernthelinguisticbehaviourofagroupof
speakers.Theterm"Englishgrammar",therefore,mayhaveseveralmeanings.Itmayrefertothewholeof
English grammar, that is, to the grammars of all the speakers of the language, in which case, the term
encompassesagreatdeal of variation.
In linguistics, grammar is the set of structural rules governing the composition of clauses, phrases, and
wordsinanygivennaturallanguage.Thetermrefersalsotothestudyofsuchrules,andthisfieldincludes
phonology,morphology,andsyntax,oftencomplementedbyphonetics,semantics,andpragmatics.(Source:
Wikipedia)’
The explanation of these terms is provided below:
1. Syntaxthearrangement ofwordsandphrasestocreatewellformed sentencesina language.
2. Morphologythestudyoftheformsofthings,inaparticularform,shape,orstructure.
3. Semanticsthebranchoflinguisticsandlogicconcernedwithmeaning.Thetwomainareas are logical
semantics, concerned with matters such as sense and reference and presupposition and implication,
and lexicalsemantics, concerned with the analysis ofword meanings and relationsbetween them.
4. Phonologythescienceofspeechsoundsincludingespeciallythehistoryandtheoryofsoundchanges
inalanguageorintwoormorerelatedlanguages.
5. Pragmaticsthebranchoflinguisticsdealingwithlanguageinuseandthecontextsinwhichitisused.
Grammar is the system of a language governed by rules. However, language development did not
beginwithformationofrules.Peoplestartedcommunicatingthroughsounds.Graduallywords,phrases
andsentenceswereformedandalanguagewascreated.Nolanguageisstatic.Itevolvesandchanges
overtime.Grammarissimplyasetofrulesthatpeoplefollowtointeractataparticulartime.
Knowledgeofgrammarofalanguageisnotnecessarytospeakit.Allofusspeakalanguageormultiple
languageswithoutanyawarenessofitsrulesandstructures.Ontheotherhand,ifwewanttolearna
foreignlanguage,grammarhelpsustoattaincompetencyinitmorequicklyandefficiently.Familiarity
withgrammaticalrulesisanaidinbuildingprociencyinthewrittenandspokenformats.
PHRASE,CLAUSEANDSENTENCE
Phrase, clause and sentence are the three structural units that create meaning in language. They
compriseofgroupsofwordswithmeaning.Understandingthesebasicunitsisthefoundationoflearning
English grammar.

Chapter-2 : Sentence Types Active - Passive Voice direct - Indirect Speech - 187 -
 Phrase:Aphraseisagroupofwordsthatmakesensebutnotcompletesense.Itcannotstandalonebut
canbeusedasapartofasentence.Forexample
1. inthenorth
2. a yellow dress
3. atfiveo’clock
Clause:Agroupofwordswhichcontainasubjectandapredicatearecalledaclause.Aclausecanmake
completesenseonitsownormayformapartofasentence.
Therearetwotypesofclauses
MainorIndependentclause:Amainclausehasasubjectandapredicateandcanstandbyitselfasa
complete sentence.
Example:
1. Hehasachainofgold.
2. Reena lives in London.
Subordinate or dependent clause: A subordinate clause also consists of a subject and predicate but
does not make complete sense on its own. It is dependent on the main clause for the reader to
understand it fully.
Example:
1. Hehasachainwhichismadeofgold.
2. Thisistheplacewherethe accidenthappened.
Thewordsin italicsare thesubordinateclauses.
Sentence:Asentenceisagroupofwordsthatmakecompletesensetoareader.Ittypicallycontainsa
subject and predicate.It may bea statement, question, exclamation, orcommand, and consists of a
mainclauseandsometimesoneormoresubordinateclauses.Itbeginswithacapitalletterandends
withafullstop.Afiniteverbisanessentialcomponentofasentence.
A sentence can be short and sweet, or long and complicated.Adding objects,complements, phrases
andclausestosentencescanlengthenthemandmakethemstructurallyandsemanticallycomplicated
Example:
1. Ilikelms.
2. Ilikehorrorlms.
3. Ilikehorrorlmswhicharebasedontruestories.
4. I like horror lms which are based on true stories and terrify me completely. All four examples
above are sentences.
Subject and predicate are the two primary structures on which a sentence stands. However, it is
imperative tounderstandallthecomponentsofasentencetograspthebasicsofgrammar.
Thebasicpartsofasentenceare:
 Subject
 Predicate
 Direct object
 Indirect object
 Object of the preposition

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 Â Verbs
 phrases
 Complements
Subject:Thesubjectisthepersonorthingaboutwhichsomethingisstated.
Predicate:Thepredicateisthepartofasentencethattellsussomethingaboutthesubject
Examples
1. MybrotherworksinDubai.
2. Thetrainarrivedlate.
3. Theoldwomanwaswalkingdownthestreet.
4. Thisismybag.
5. TheweatherinMumbaiishotandhumid.
Thewordsinboldtellnamesaperson,placeorthingaboutwhich/whomsomethingisbeingsaid.Theyare
the subjects.
Thesecondpartofthesentencewhichstatessomethingaboutthesubjectisthepredicate.
Directobject:Adirectobjectisapersonorthingthatisaeffectedbytheaction(verb)ofthesubject.You
could say that the direct object “receives the action of the verb.” It follows the verb and answers the
question ‘what’.
Examples
1. Ramkickedtheball.
2. TheballhitSheila.
3. Ruhi repaired the computer yesterday.
4. Webuiltacastleonthebeach.
5. Ihavebakedacake.
The ball, Sheila, computer, castle and cake receive the action from the subject. The sentencestructure is
Subject,verb,object.
IndirectObject:Anindirectobjectisapersonorthingthattheactionisdonetoorfor.
Theindirect objectusuallycomesjustbeforethedirectobjectandcanbecalledthereceiverofthedirect
object.Itdirectlyfollowstheverbandanswersthequestion‘whom’.ThestructureisSubject,Verb,Indirect
Object,andDirectObject.
Examples
1. ImadeNehapastaforlunch.
2. Webuilthimacastleonthebeach.
3. Preetiiswritingmealetterrightnow.
4. Ihavemademymomapromise.
5. Ms.NairteachesusEnglishgrammar.
Neha, him, me, my mom, and us are the ones for ‘whom’ something is done. They are the indirect
objects.
TheObjectofthePreposition:Theobjectoftheprepositionisanounorapronounthatcompletesits
meaning.

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 Example1:
 Thedogislookingat….
Thissentenceisincomplete.Wedon’tknowwhatthedogislookingat.
Thecompletesentenceis–
 Thedogislookingatthemouse.
“themouse”istheobjectofthepreposition“at.”
Example2:
 Youaregoingto…..
Thissentence isincomplete.We don’t knowwhereyou aregoing.
The complete sentence is
 YouaregoingtoKolkata.
“Kolkata”istheobject ofthepreposition“to.”
Donotconfusetheindirectobjectwiththeobjectofthepreposition!
Havealookatthefollowingexamples:
1. LalitgaveRimathepen.
2. LalitgavethepentoRima.
Inthe first sentence Rima is theindirectobject.
Inthesecondsentence Rimaistheobjectofthepreposition‘to’.
Thetwo sentencesbasically have the same meaning butarestructurally different.
Howcanyoudistinguishbetweenanindirectobjectandtheobjectofthepreposition?
 The object of the preposition comes immediately after the preposition.
 Theindirect object does not comeimmediatelyafter apreposition.
 Theindirectobjectisusuallyfollowedbythedirectobject,whereastheobjectoftheprepositiondoes
not follow this principle.
Verbs: A verb is customarily defined as a part of speech that describes an action or occurrence or
indicatesastateofbeing.Ineverysentencethemostimportantwordistheverb.
Therearevarioustypesofverbs,accordingtotheirfunction,inthestructureofthesentence.
1. Finiteverbs:Afiniteverbislimitedbyitssubject.Itagreeswithitssubjectinnumberandperson.It
alsochangesaccordingtothetenseofthesentence.Itformsthemainclause.
Examples
a. Iamateacher.
b. Heisateacher.
c. Shegoestoschooleveryday.
d. Theygotoschooleveryday.
2. Non–Finiteverbs:A nonfiniteverb isaformoftheverbthatdoesnotchangeaccordingtotheperson,
numberortenseofthesentence.Itcannotstandaloneasthemainverbinasentence.Therearethree
kinds of non finite verbs
i. Infinitive:Itisaformoftheverbusedgenerallylikeanoun.Theword‘to’isfrequentlyusedwith
an infinitive.

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 Toerrishuman.
Sunitalovestodance.
ii. Participle(pastandpresent)Aparticipleisthatformoftheverbwhichhasthenatureofbotha
verbandanadjective.Presentparticipleendswithing,whereasthepastparticipleendswith–ed
(walked)orpastformoftheverb(burnt).
Hesatonabrokenchair.
Wemetagirlcarryingabagoffruit.
iii. Gerunds–Agerundisthatformoftheverbwhichendsin–ing,andhasthefeaturesofanounand
averb.
Playingcricketisnotallowed
here. I like reading religious texts.
3. Auxillaryverbs: These arethe helpingverbs.The formsof verbs‘be’(am, is,was,etc,),haveanddo,
when used with ordinary verbs to make tenses, passive forms, questions and negatives are called
auxillariesorhelpingverbs.(am,is,are,was,were,has,have,had,does,do,did)
Examples:
Heisworkingonaproject.
Thegatewasopenedbythepostman.
4. Modals:Theverbs am,is,are,was,were,has,have,had,does,do,did,dareto;needto;usedto;ought
to, are modals. They are used before ordinary verbs and express meanings such as permissions,
possibilities, certainty and necessity.
Examples:
Icandriveacar.(ability)
Youmaycomein.(permission)Weshouldobey laws.(obligation)
5. Transitive verbs: Transitive verbs are action verbs that always express do able activities. These verbs
alwayshavedirectobjects,meaningsomeoneorsomethingreceivestheactionoftheverb.
Examples:
Meherspokethetruth.Thedriverstoppedthecar.
Thedonkey kickedthewasherman.
6. Intransitiveverbs:Itdenotesanactionthatdoesnotpassovertoanobject.Itmayexpressastateor
being.
Examples:
Heranalongdistance.(action)
Thebabysleepstwelvehoursa day.(state)Thereisaawin thisdesign.(being)
Phrases
Phrasesaregroupsofrelatedwordsthatmakesomesensebutnotcompletesense.Theymaynothave
a subject,orapredicate,or both—andthatactasasinglepartofspeech.Thereareseveraltypesof
phrases:
1. Prepositionalphrase:Aprepositionalphraseisagroupofwordsthatbeginwithaprepositionandare
followedgenerallybyanounorpronounoranythingthatactsasanoun,forexample,agerund.
Shegavethebooktohim.

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 Mycarisstuckinthepothole.
Mymotherpreparesfoodfortheentirefamily.
Prepositionalphrasesarealmostalwaysusedasadjectivesoradverbs.Ifthephraseisbeingusedasan
adjective,itcomesafterthenounorpronounitisdescribing.
• Thebeautifulfountainispartof the shopping complex.(ofisthepreposition;shopping complexis
anounandistheobjectofthepreposition.Thephrasedescribesthewordpart.)
Inaprepositionalphrase,theobjectivecaseofapronounisused.me, her, him, us, them, whom.You
isthesameinthesubjectiveandobjectivecase.
2. Nounphrase:Aphrasethatdoesthefunctionofanounisanounphrase.Nounphrasesare composed
ofanoun(orpronoun)anditsmodifiers.Theyareusedassubjects,objects,orcomplements.
• Thestrange,creakingsoundsscaredtheinmatesofthehouse.(nounphraseassubject)
• Saritaeatsalotoffoodatlunch.(nounphraseasobject)
• Thebeachisagreatplaceforapicnic.(nounphraseascomplement)
3. Verbphrase:Averbphraseconsistsofamainverbandoneormorehelpingverbslinkedtogether.They
serve as the predicate of a sentence or clause. Theverbphrasedefinesthedifferenttimesofthe action
• Shyamhaseatenachocolate.
• Shyamwaseatingachocolate.
• Shyamhas already eatenachocolate.
• Shyammust have been eatingachocolate.
Thepatternforaverbphrasecanbeaslongasthis:auxiliary/modalverb+auxiliaryverb+auxiliaryverb+
mainverb(asinthesentenceabove)
Complements:
Awordorwordgroupthatcompletesthemeaningofasubject,anobject,oraverbiscalledacomplement.
1. Subject complement: Follows a verb and modifies or refers to the subject. It may be a noun or an
adjective.
 Kamlaispretty.(Theadjectiveprettyisasubjectcomplement;itdescribesthe subject, Kamla.)
 Ms. Monica Sharma is an English teacher. (The noun phrase English teacher is also a subject
complement; it describes Monica Sharma.)
2. Objectcomplement:Followsandmodifiesorreferstoadirectobject.
 IconsiderIndiantelevisionnegative. (televisionisthedirectobject.Negativedescribestelevision;
itis the objectcomplement.)
 ThejudgeselectedherMiss Universe, 2016. (Miss Universeistheobjectcomplement,describing
thedirect object her.)
3. Verbcomplement:Thisisadirectorindirectobjectofaverb.Itmaybeanoun,pronoun,orwordor
wordgroupactingasanoun.
 SushmagaveShaily my chocolate. (Shailyistheindirectobject,my chocolateisthedirectobjectof
theverbgave. Bothare consideredverb complements).

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 TYPESOFSENTENCES
Sentencesareclassifiedaccordingtofunctionandstructure.
1. Classification of Sentences according to Function:
Therearefourtypesofsentencesbasedonfunction:
a. Declarative Sentences
b. Imperative Sentences
c. Interrogative Sentences
d. Exclamatory Sentences
a. Declarativesentences:Declarativesentencessimplymakeastatementorexpressanopinion.In other
words,theymakeadeclaration.Thesesentencescanbepositiveornegativestatements,aproverb,a
universaltruthorasuggestion.These sentencesendwitha fullstop.
For example
i. It is raining. (declaration)
ii. Thechild is goingto school.(simple statement)
iii. Honestyis thebest policy (universal truth)
iv. Barking dogs seldom bite(proverb)
v. She shouldnot shout at elders. (negative)
vi. Myfriendisagoodactor.(opinion)
b. Imperative sentences: Sentences that express an order, command, advice, request, proposal or a
suggestionarecalledimperativesentences.Theycanendinafullstoporexclamation,dependingon
the imperative mood.
Forexample
i. Pleaselisten to me. (request)
ii. Get lost. (command)
iii. Let’s gofor a long drive.(suggestion)
iv. Thisone looksgood.(advice)
c. InterrogativeSentences:Sentencesthataskaquestionareinterrogativesentences.Usually‘wh’ words
are used to frame questions, e.g. which, what, when, where, who, why, whom, how. A verb always
followsa‘wh’wordwhileframingaquestionsentence.Theyendwithaquestionmark.
Forexample
i. Whatisyourname?
ii. Wheredo youlive?
iii. Canyouhelpmesolvethepuzzle?
iv. Whydidyoushout?
v. DoyouknowwhereSitalives?
d. ExclamatorySentences:Sentencesthatexpressstrongfeelingsoremotionssuchasjoy,sorrow, regret,
surprise,wonder etc.,are calledexclamatory sentences.Theyendwith an exclamationmark.
Forexample
i. Whatabeautifulpieceofart!(wonder)

Chapter-2 : Sentence Types Active - Passive Voice direct - Indirect Speech - 193 -
 ii. Hurray!Wewonthematch.(joy)
iii. Alas! The pet died. (sorrow)
iv. Ohmygod!Whendidyoucome?(surprise)
v. Whatashame!(regret)
2. ClassificationofSentencesaccordingtoStructure:Therearefourtypesofsentencesbasedonfunction:
a. Simple sentences
b. Compound sentences
c. Complex sentences
d. Complex Compound sentences
SimpleSentences:Asimplesentencestructureconsistsofonlyonesubjectandonepredicate.It has
justonefiniteverb.Inotherwords,itconsistsofasinglemainclause.
 I walk.
This two word simple sentence has one main clause which consists of the subject ‘I’ and the
predicate ‘walk’.
 Shyamaleeranafterherlittlebrother.
Thissimplesentencehasonemainclause.Thesubjectis ‘Shymalee’,andthepredicate, ‘ran after
her little brother. Thepredicateisa verbphrase thatconsistsofmorethanoneword.
 In great anger, the man shouted and yelled at his lazy son.
Thissimplesentencehasonemainclausewithasinglesubject, ‘man’,andsinglepredicate, ‘shouted
and yelled at his lazy son’. This predicate has two verbs, known as a compound verb: shouted and
yelled. This compoundverb shouldnotbeconfusedwithacompoundsentence. ‘In great anger’ and ‘At
his lazy son’ areprepositionalphrases.
CompoundSentences:Acompoundsentenceis composed oftwoormoremain/independentclauses.
Itdoesnothaveadependentclause.Theclausesarejoinedbyacoordinatingconjunction,acomma,a
semicolonandevenacolon.
(Coordinatingconjunctionsjoingrammaticallysimilarelementstwonouns,twoverbs,twomodifiers,
two independent clauses such as for, and, nor, but, or, yet, and so, the first letters of which spell
“fanboys”).Correlativeconjunctionsworkinpairstojoinwordsandgroupsofwordsofequalweightin
asentence.Therearemanydifferentpairsofcorrelativeconjunctions:either...or,notonly...but(also),
neither...nor, both...and, whether...or, just as...so, no sooner...than, rather...than.)
Examples:
 Therobbertriedtoescapebutthepolicecaughthim.
 IwilldecidewhatIhavetodo;youarerequestednottointerfere.
 Thelawhasbeenpassed:from1July,allbusinesseswillhavetocomplywithGSTnorms.
 Thereragedonfordays;consequently,thewholeforestwasdestroyed
 Thenightcameon,therainfellheavilyandweallgotverywet.
Complex Sentences: A Complexsentence has one main clause and one or more Dependent clauses
(also called subordinate clauses). The subordinating conjunction performs two important functions
withina sentence.First,demonstrate the importanceof theindependentclauseandsecond,provide
a link between two ideas in the same sentence by indicating a time, place, or cause and therefore
affecting the relationship between the clauses.

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 Thesubordinatingconjunctionsincludethefollowing:
Indicating Time: after, before, since,when, whenever, while, until, as, once, as long as.
Indicating Place: where, wherever.
IndicatingManner:asif,asthough,how.
IndicatingReason:because,since,sothat,why,inorderthat,nowthat,as,so.
IndicatingCondition: if, unless,until, in case(that),provided that, only if/ if only, that
Indicating Concession: although, though, even though, while, whereas, rather than.
ExamplesofComplexSentences:
• Theboyranawaywhen he saw the lion.(onemainclause+onesubordinateclause)
• When he saw the bear, heclimbedthenearesttree, because he was terrified. (onemainclause+
two subordinate clauses)
• Ithinkthat you should ask him personally, if it is convenient for him, before you call on him..(one
main clause + three subordinate clauses)
In complex sentences, subordinate clauses function within the sentence as adjectives, adverbs, or
nouns.
 Anadjectiveclauseisa dependentclausethatfunctionslikeanadjective;anadjectivemodifies
ordescribesanoun. Inthissentence:
Thestarperformerattheconcertchosedresseswhichwouldlookgoodonher.
Thedependentclausewhichwouldlookgoodonherfunctionsasanadjectivetomodify‘dresses.’
 An adverb clause is a dependent clause that functions like an adverb; an adverb modifies or
describes averb,anadjectiveoranotheradverb.Intheexamplesentence:
When the foodarrived, the childrenate everything,
Thesubordinate clause‘whenthefood arrived’ functions asan adverbto modify‘ate.’
 Anounclauseisadependentclausethatfunctionslikeanoun;anounisaperson,place,orthing.
In the example sentence:
That it will rain, seems likely.
The subordinate clause, ‘that it will rain,’ serves as the subject of the sentence. This sentence is
considered a complex sentence because it has both, an independent clause ‘It seems likely’ and a
dependent clause, ‘that it will rain.’
Complexcompound sentences: A sentencewith two ormore independentclausesplusoneor more
dependent clauses is called compoundcomplex or complexcompound.
Inthefollowing examplesindependentclauses havebeenunderlined.
• Hesmiledbrightlyandlaugheddelightedly,whenhesawhisnewbicycle.
• AlthoughIliketowatchmovies,Ihaven’tbeenabletoseeanylately,andtherehaven’tbeenany
interesting ones released recently.
• ThedooroftheroomwasopenasIcrossedthehallandIsawthemostbeautifularrangementof
owners.
• Iusuallyuseawoodenspoon,wheneverIcookinnonstickware,butsometimesIprefertousemy
plasticspatula.

Chapter-2 : Sentence Types Active - Passive Voice direct - Indirect Speech - 195 -
 ACTIVEPASSIVEVOICE
Voiceisthatformoftheverbwhichshowswhetherwhatisdenotedbythesubjectdoes something or has
something done to it.
1) ActiveVoice
Averbissaidtobeinactivevoicewhenitsformshowsthatthepersonorthingdenotedbythe subject
doessomething,thatis,itisthedoeroftheaction.
Itispreferableto usetheactivevoicewheneverpossibleforclarity,conciseness,andforconveying
themessagemore effectively. Passivevoicesentencesoftenusemore words, can bevague, andcan
leadtoatangle ofprepositionalphrases.
For example:
 Rohitwroteastoryonthewall(subject:Rohit;object:wall)
 Sanyasangasong(subject:Sanya;object:song)
 Radhahittheboy(subject:Radha;object:boy)
 Amit read the letter (subject: Amit;object:letter)
 Haveyoudoneanythingaboutaroom?(subject:you;object:room)
 WehavebookedaroomforyouintheGrandhotel.(subject:We;object:room)
2) Passive Voice
A verb is said to be in passive voice when its form shows that the person or thing denoted by the
subjecthassomethingdonetoit,thatis,itisthereceiveroftheaction.
Though active voice is the preferred mode of communication, there are sometimes good reasons to
use the passive voice.
 ToemphasizetheactionratherthantheactorTheGSTbillwaspassedintheparliament.
 Tokeepthesubjectandfocusconsistentthroughoutapassage
After a lengthy discussion, the decision was taken that discipline must be maintained in the
college campus.
 The speaker is being discreet by not naming the person/ persons responsible for any deed/
action.
The message has been misinterpreted.
 TodescribeaconditioninwhichtheactorisunknownorunimportantThepublicbuildingswere
damagedintheriots.
 Tocreateanauthoritativetone
Entryintotherestrictedareaisforbidden.
 In most newspaper headlines as the news/action is moreimportant than thedoer. Nagapada
destroyed by cyclone fury.
Examplesofpassivevoice:
 AstorywaswrittenonthewallbyRohit
 AsongwassungbySanya
 TheboywashitbyRadha
 TheletterwasreadbyAmit
 Companytargetsareseteveryyear
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 Â Thefactorywassetupin1985.
 Productiontargetsweremetbytheworkforce.(Thefocusisontheproductiontargets,butatthe
same time we mention who they were met by ,without emphasizing it.)
Rulesforchangingactiveintopassive:
(a) Changeofsubjectandobject:Theobjectoftheactivevoicebecomesthesubjectofthepassivevoice
andthesubjectbecomesobject ofthepassivevoice.
Activevoice:Ramkickedtheball.
Passivevoice:TheballwaskickedbyRam.
(b) Changeofverbform:Theverbintheactivevoiceischangedintoaformof‘be+pastparticiple’ofthe
verb.
Activevoice:Sitaistakingthedogforawalk.
Passivevoice:ThedogisbeingtakenbySitaforawalk.
Studythefollowingtabletounderstandthechanges:
Tense(orModal)+base Activevoice Passive voice
Simple present throw amthrown
throws is thrown
arethrown
Present continuous amthrowing ambeing thrown
is throwing is being thrown
are throwing are being thrown
Present perfect hasthrown has been thrown
have thrown have been thrown
Simple past threw wasthrown
were thrown
Past continuous was throwing was being thrown
were throwing were being thrown
Past perfect hadthrown had been thrown
Simple future will throw will be thrown
shall throw shall be thrown
Future continuous will be throwing willbe thrown
shall be throwing shall be thrown
Future perfect will have thrown will have been thrown
shall have thrown shall have been thrown
Can/may/must etc. +base Canthrow canbethrown
Mustthrow must bethrown

c) Changeof Pronouns The Nominative/ subjective case: I, you, he, she, it, we, you, they changes to
Accusative/objectivecase:me,you,him,her,it,us,you,them.

Chapter-2 : Sentence Types Active - Passive Voice direct - Indirect Speech - 197 -
 Thenominativecaseisusedforthesubjectoftheverb,i.e.thewordwhichdenotes who/whatdoes
whattheverbsays.Theaccusativecasemarkstheobjectoftheverb,i.e.thewordwhichreceivesthe
actionoftheverb(whenthereissuchareceiver).
Active voice: I like T.V programmes with positive content.
Passive voice:T.V. programmes with positive content are likedby me.
d) Addition of the word ‘by’: The passive verb is followed by ‘by’+ ‘doer’. If the doer is not known or
irrelevant,itis omitted in thepassive voice.
Active voice: Lalita teaches poor children every weekend.
Passivevoice:Poorchildrenaretaught byLalitaveryweekend.
Activevoice: Someonebroke all thepots.
Passivevoice:Allthepots werebroken.(objectnotrequired)
e) Whentherearetwoobjectsinanactivesentences,therearetwopossiblepassivesentences
Sentence1:Thefarmergavethecowssomehayandoats.(ActiveVoice)
Sentence1:Thecowsweregivensomehayandoatsbythefarmer.(Passivevoice)
Sentence2:Thefarmergavesomehayandoatstothecows.(ActiveVoice)
Sentence2:Somehayandoatsweregiventothecowsbythefarmer.(Passivevoice)
Therearetwoobjectsineachoftheabovesentences:
Object1=indirectobject o thecows
Object2=directobject o somehayandoats
f) Changinginterrogativesentencesintothepassive:
1. Theprimaryauxiliaryverbsdo,doesordiddonotappearinthepassiveform.Theygetconverted
totheformoftheverb‘tobe’.
Active: Does Seema like painting?
Passive: Ispainting liked by Seema?
Active: Did Seema like painting?
Passive: Was painting liked by Seema?
2. Theverbs,has,have,had,will,shall,can,mayetc.donotchangetheirpositionatthebeginning
ofthesentencewhentheactivevoiceischangedtothepassivevoice.
Activevoice: Hashe donehishomework?
Passivevoice:Hashishomework beendonebyhim?
Activevoice:WillSalmaeatthemango?
Passivevoice:WillthemangobeeatenbySalma?
3. Thequestionwordswhen,why,where,howorwhatdonotchangetheirpositionatthebeginning
ofthesentencewhentheactivevoice ischangedintothepassivevoice.
Notewhochangestobywhom,andwhomintowho.
Activevoice:Whatdidtheleadersaytohisfollowers?
Passivevoice:Whatwassaidbytheleadertohisfollowers?
Activevoice:Whomdidyougreetattheparty?
Passivevoice:Whoweregreetedbyyouattheparty?

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 g) ChangingImperativesentencesintopassive:Imperativesentencesaresentenceswhichexpress advice,
suggestion, request or command.
Forexample
 Close the door.
 Please give me the bottle.
 Pickupthephone.
 We should exercise every day.
These sentences express advice, request or command.

Generally,sentencescontainingrequesthavetheword‘please’init.Suchsentencesstartwith‘You
arerequestedto’inthepassiveform.
Please bring me some tea. (Active Voice)
Youarerequestedtobring mesome tea.(PassiveVoice)
Imperativesentencescontainingadvicestartwith‘Youareadvisedto’inthepassivevoice
Doyourworkontime.(ActiveVoice)
Youareadvisedtodoyourworkontime.(PassiveVoice)
Donotdrink and drive.(Active Voice)
Youareadvisednottodrinkanddrive.(PassiveVoice)
Imperativesentencescontainingcommandorordergenerallystartwith‘Let’inthepassiveform.
Bring in the culprits.(Active Voice)
Let theculprits be brought in. (Passive Voice)
Cook the food. (Active Voice)
Let the food be cooked. (Passive Voice)
Youcanchangethesentencescontainingcommandororder intopassiveusing‘Youareorderedto’
also.
Imperativesentencescontainingsuggestionarechangedintothepassiveformbyaddingthe
modal verb ‘should’ suggesting correctness and obligation.
Respect elders in the family. (Active Voice)
Elders in the family should be respected. (Passive Voice)
Follow your dreams. (Active Voice)
Your dreams should be followed. (Passive Voice)
h) Prepositionalsentences: Prepositions intheactivevoiceofastatementdonotchangetheir place in
passive voice.
Example:
 Parentsobjecttochildrenwatchingactionmovies.(ActiveVoice)Childrenwatchingactionmovies
is objected to by parents. (Passive Voice)
i) Modals:Can,could,shouldetcdonotchangewhenchangingactiveintopassive.
 Therichshouldhelpthepoor.(Active voice)
Thepoorshould behelpedbytherich.(Passivevoice)

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 Â Students ought to listen to their teacher. (Active voice)
Theteacheroughttobelistenedto bythestudents.(Passivevoice)
j) Onlytransitiveverbscanbechangedintopassiveform,intransitiveverbsremainintheactiveform
only.
Explanation:
Transitiveverbsareactionverbsthathaveanobjecttoreceivetheaction.
Example:
Ibakedacake.(active).
Acakewasbakedbyme.(passive)
Varun hit the ball.(active)
Theball was hitbyVarun. (passive)
Intransitiveverbsareactionverbsthatdonothaveanobjecttoreceivetheaction.
Example:
TheSunrisesintheeast.Waterflowsunderthebridge.
(Nopassivevoicepossiblefortheabovesentences)
3. PassiveVoice:ChangingPassivetoActiveVoice
When you change a sentence from passive to active voice, reverse the position of thesubject and
object.Youcanidentifythedoerbylocatingthe ‘bythe..’phrase.Appropriatechangesintheformof
theverbmustbemade.Attimes,the‘doer’isnotidentifiedinthesentence.Insuchcasesyouhaveto
presumeadoerfromthecontextofthesentence.
Therulesappliedtochangeactivevoiceintopassivehavetobeinvertedtochangepassiveintoactive
voice.
Passive Voice ActiveVoice
Thebook(objectonwhichactionisperformed; Mostoftheclass(subject)isreading(verb)the
subjectinthissentence)isbeingread(verb) by book. (object)
mostoftheclass.(subjectwhoperformsthe
action; object in this sentence)
Results(object onwhich action is performed; The researchers (subject) will publish (verb) the
subjectinthissentence)willbepublished results (object) inthenextjournal.
(verb)by?inthenextjournal.
A policy of whitewashing and coverup (object The CIA director and his close advisors (subject)
onwhichactionisperformed;subjectinthis havepursued(verb)apolicyofwhitewashing
sentence)hasbeenpursued(verb)bytheCIA andcoverup.(object)
directorand his close advisors.(subjectwho
performsthe action; object inthissentence)
Mistakes (objectonwhichactionis We (subject) made (verb) mistakes (object).
performed; subjectinthissentence)were The agent‘We’ismadethe‘subject’ofthe
made(verb)byAgentisnotspecified sentence.

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 DIRECTANDINDIRECTSPEECH
Wemayreportthewordsofaspeakerintwoways
1. Wecanquotetheactualwordsspokenbythespeaker.ThisiscalledDirectSpeech.
2. Wemayreportwhatwassaidwithoutquotingthespeaker’sexactwords.ThisiscalledIndirector
Reported Speech.
UseofDirectSpeech:
1. Toconveytheexactwordsofthespeaker.
2. Tosupplementandclarifytheinformationthatisbeingreported.
3. Eyewitnessaccountsinnewsstories.
4. Insertingdialoguesinnarrativesandstoriesdefinescharacters.Italsobringsinvarietyandinculcates
interest in the reading the story/novel/play. A narrative without dialogues often becomes dull and
boring.
5. Inreportingminutesofmeetings,themostsignificantpointsthathavebeenmademustbestatedin
direct speech.
6. While reporting speeches, many direct quotes are included to convey the essence of the speaker’s
message.
7. Scriptsofplaysandfilmsusedirectspeech.
UseofIndirect/ReportedSpeech:
1. Itisimpossibleandtiringtoconveyanentireconversationindirectspeechtoanyone.
2. Toavoidlengthyandconfusingdocumentation.
3. Tobringinclarityandprecisenesstothereporting
4. Mostpersonal/officeinteractionsusereportedspeechtoconveymessages/conversationswithothers.
5. Generally,reportsofspeechesduringAnnualGeneralMeetings/othermeetingsarenotedinindirect
speech.
6. Newspaperreportsusetheindirectspeechformatmostoftentoreportwhosaidwhatandwhere.
Examplesofdirectandindirectspeech:
Shesaid“Iambusytomorrow”.(Direct)
Shesaidthatshewasbusythenextday.(Indirect)
Notethechangesinthesentencewhendirectspeech ischanged toindirectspeech:?
1. Notice that in direct speech inverted commas are used to mark o the exact words of the speaker. In
indirect speech,wedonot usethem.
2. The conjunction ‘that’ is used before the indirect statement.
3. Thepronoun‘I’ischanged to‘she’.
4. Theverb‘am’ischangedto‘was’.
5. Theadverb‘tomorrow’ischangedto‘thenextday’.
RulesforchangingDirectSpeechintoIndirectspeech
Certain rules need to be followed while changing direct to indirect speech. Below is a list of rules for the
same:

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 1. Whenthe reporting or principal verbis in thepast tense, allpresent tenses of thedirect words are
changed into the corresponding past tenses.
Notethe changesin thetablebelow:
Rule Directspeech Indirectspeech
Simplepresentchangesto “Ialwaysdrinkcoffee”, shesaid Shesaidthatshealwaysdrank
simple past coffee.
Presentcontinuous “Iamreadingabook”,he Heexplainedthathewas
changesto explained. readingabook
past continuous
Presentperfectchanges Shesaid,“Hehasfinishedhis Shesaidthathehadfinishedhis
topastperfect work” work.
Presentperfect “IhavebeentoSpain”,hetold Hetoldmethathehadbeento
continuoustopast me. Spain.
perfect
continuous
Simplepastchangestopast “BillarrivedonSaturday”,he Hesaidthat Bill hadarrived
perfect said. onSaturday
remainspastperfect “Ihadjustturnedoutthelight,” Heexplainedthathehadjust
heexplained. turnedPastperfectoutthelight
Pastcontinuouschanges topast “WewerelivinginParis”,they Theytoldmethattheyhad
perfectcontinuous toldme. been living in Paris.
Futurechangestopresent “IwillbeinGenevaonMonday”, Hesaidthathewouldbein
conditional he said GenevaonMonday
Futurecontinuouschangesto Shesaid,“I’llbeusingthecar Shesaidthatshewouldbe
conditional continuous nextFriday.” usingthecarnextFriday.
Exception:
1. Ifthereportedspeechcontainsauniversalfact,orascientifictruth,thetenseoftheverbdoesnot
changeevenifthereportingverbisinthepasttense.
a. Hesaid,“Honestyisthebestpolicy.”(Direct)Hesaidthathonestyisthebestpolicy.(Indirect
b. The teacher said, “The earth revolves around the sun.” (Direct) The teacher said that the earth
revolves around the sun. (Indirect)
2. Ifastatementisstillrelevant,wecanchoosewhethertokeeptheoriginaltenseorchangeit.
Sheilasaid,“Frenchiseasytolearn.”(Direct)
SheilasaidthatFrenchis/waseasytolearn.(Indirect)
3. Ifthereportingverbisinthepresenttense,thetensesoftheDirectSpeechdonotchange.
He says,“I likeclassical music.”(Direct)He says helikesclassical music.(Indirect)
Rohitsays,“Iwatchedamovieatnight.”(Direct)Rohitsayshewatchedamovieatnight.(Indirect)
2. Words expressing nearness intime or place are generally changed into words expressing distance.
Studythe tabletounderstandthechanges.

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 Direct speech Indirect speech
Here There
Today Thatday
Yesterday The day before
Tomorrow Thenextday
Next week The following week
Next month The following month
Now Then
Ago Before
Thus So
Lastnight The night before
This That
These Those
Come Go
3. The pronouns of the direct speech are generally changed from first person and second person
to the third person in the indirect speech.

a) Firstpersonpronounsinthedirectspeechchangeaccordingtothesubject.
Rahulsays,‘IamgoingtoThailand’.(direct)RahulsaysthatheisgoingtoThailand.(indirect)
Priya says, ‘I will leave soon’. (direct) Priya said she will leave soon. (indirect)
b) Secondpersonpronounschangeaccordingtothenounsorpronounscomingafterthereportingverb.
IsaidtoSachin,“Youwillhavetoplaycricket”(direct)
IsaidtoSachinthathewouldhavetoplaycricket(indirect)
Teachersaidtoyou,“Youarewrong”.(direct)Teachersaidtoyouthatyouwerewrong.(indirect)
c) Thirdpersonpronounsofthedirectspeechinthenominativecase,thatis,asthesubject,
Thepronounsofthedirectspeecharechanged,wherenecessaryso that their relations with the reporter
and the hearer are indicated, rather than the original speaker, are indicated.
Hesaidtome,“Idon’tbelieveyou.”
Hesaidtomethathedidn’tbelieveme.
Shesaidtohim,“Idon’tlikeyou.”
Shesaidtohimthatshedidn’tlikehim.
Isaidtohim,“Idon’ttrustyou.”
IsaidtohimthatIdidn’ttrusthim.
Isaidtoyou,“Idon’thaveanythingforyou.”
IsaidtoyouthatIdidn’thaveanythingforyou.

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 4. ChangesinModalsinindirectspeech.
Rule Direct speech Indirect speech
Canchangesintocould Hesaid,“Icandriveacar” Hesaidhecoulddriveacar
Maychangesintomight Hesaid,“Imaybuya Hesaidthathemightbuya
computer” computer.
Mustchangesintohadto Hesaid,“Imustworkhard” Hesaidthathehadtowork
hard.
Modalslikewould,should,oughtto,andmightdonotchangeduringtheconversion.
Example:
Theysaid,“Wewouldapplyforavisa”.
Theysaidthattheywouldapplyforavisa.(indirect)
Hesaid,“Icould runfaster”.(direct)
Hesaidthathecouldrunfaster.(indirect)
Hesaid, “Ishould availthe opportunity.(direct)
Hesaidthat he shouldavail theopportunity. (indirect)
Hesaidtome,“Yououghttowaitforhim”.(direct)
HesaidtomethatIoughttowaitforhim.(indirect)
5. Changesforimperativesentencesfromdirecttoindirect:
a) Inreportingcommands,advice,suggestionsandrequests,theindirectspeechbeginswithaverb
expressing the sentiment indicated in the sentence, e.g. order, request etc.
b) Theverbisfollowed bythe personalobjectandthe‘to’infinitive.
a) Fornegative imperative sentences, don’t ordo not are substitutedby ‘not to’.
b) ForImperativesentencesstartingwith‘let’andexpressingaproposalorsuggestion,‘said’should
bechangedto‘proposedto’or‘suggestedto’
Example:
Themastersaidtotheservant,“Finishtheworkat once”.(direct)Themasterorderedtheservantto
finish the work at once.(indirect)
Theteachersaidtothestudent,“Pleasestudyproperly”.(direct)Theteacherrequestedthestudentto
study properly (Indirect)
Fathersaidtohisson, “Workhard for successinlife”(direct) Fatheradvisedhissontoworkhardfor
success in life. (indirect)
6. Changesforinterrogativesentencesfromdirecttoindirect:
a) ‘Said to’changesto ‘asked’,‘demanded’or‘enquired’,dependingonthenatureofthesentence.
b) Whenthequestioninthereportedspeechbeginswithhelpingverbslikeam,is,are,was,were,
do,does etc thereportingverb isfollowed by ‘if’ or ‘whether’.
c) Ifthesentenceisstartwithintegrativepronounoradjectiveandinterrogativeadverb,likewhat,
whom, where, why, how, which, etc. the same word is used to introduce the question in the
indirectspeech.Inotherwords,thequestionwordbecomesthejoiningwordinsteadofthat, ifor
whether.

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 d) Theinterrogativesentenceisconvertedinassertivesentence,forthatweplacesubjectbefore
theverbandthequestionMark(?)isreplacedwithfullStop(.).
e) In allInterrogativesentences if Reporting Verb is‘say/say to, says/says to, will say/will say to or
said/saidto’,inIndirectSpeechalsoitwillbechangedto‘ask,asks,willaskorasked’.
Examples:
Sania asked, ‘Are you coming with them?”(direct)
SaniaaskedifIwascomingwiththem.(indirect)
“Haveyouanythingtosayonbehalfoftheaccused?”saidthejudgetothelawyer.(direct)
Thejudgeenquiredofthelawyerifhehadanythingtosayonbehalfoftheaccused.(indirect)
Hesaidtome,“Whatareyoudoing?”(direct)
HeaskedmewhatIwasdoing.(indirect)
Thegentlemansaid, “Whereisthemarket?”(direct)
Thegentleman askedwherethemarket was. (indirect)
7. Changesforexclamatorysentencesfromdirecttoindirect:
a) Exclamatory sentences change into assertive sentences.
b) Interjections are removed.
c) Exclamationmarks changeinto fullstops.
d) ‘Wh’ words likewhatand whenchangeintoadjectives.
e) Changesalsodependonthemood of the sentence.Refertothetable below.
MoodinDirectSpeech VerbinIndirectspeech
sorrowinreported speech exclaimed with sorrow/grief/exclaimed sorrowfully or cried
out
happiness in reported speech exclaimed with joy/ delight/ exclaimed joyfully
surprise in reported speech exclaimed with surprise/ wonder/ astonishment
Thereportersaid,“Alas!Manyliveshave beenlostduetotsunami”(direct)
Thereporterexclaimed sadlythatmanyliveshad been lostduetotsunami.(indirect)
Thegrandmothersaid,“Mayyou meetwithsuccesswhereveryou go”(direct)
Thegrandmotherblessedhergrandsonthatheshould meetwithsuccesswhereverhegoes.(indirect)
Theforeignersaid,“WhatamanObamais!”(direct)
Theforeignerexclaimed in wonderthatObamawasagreatman.(indirect)
8. ‘Said’ischangedto‘wish’incaseof greetingslikegoodmorning,goodafternoon, goodevening.
Hesaidtome,“goodmorning”(direct)Hewishedmegoodmorning.(indirect)
9. ‘May’or‘MayGod’……..’kindofblessingschangeintowishedorprayed.
Shesaidtoherfriend,“MayGodgrantyousuccessinyourexamination”(direct)
SheprayedthatGodmightgrantherfriendsuccessinherexamination.(indirect)

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 Rulesforchangingindirecttodirectspeech
TochangefromIndirecttoDirectSpeech,therulesoftheDirectSpeechareappliedinthereverseorder.
 Usethereportingverb,“say”or“saidto”initscorrecttense.
 Remove the conjunctions ‘that, to, if or whether etc’ wherevernecessary.
 Insert quotation marks, question mark, exclamation and full stop, wherever necessary.
 Putacommabeforethestatement.
 Write thefirst wordof thestatement withcapital letter.
 Changethepasttenseintopresenttensewhereverthereportingverbisinthepasttense.
 Convertthepast perfecteitherintopasttenseorpresentperfectasrequired.
 Changethepronounsasperthecontextofthesentence.
HeaskedmewhatIwasdoing.(Indirect)
Hesaidtome,“Whatareyoudoing?”(Direct)
Heasked ifthat was his pen.(Indirect)
Hesaid“Isthisyourpen?”(Direct)
Ramaordered Arjuntogoaway.(Indirect)RamasaidtoArjun,“Goaway.”(Direct)
He requested him to open the door for him.(Indirect) He said to him, “Please, open the door for
me.”(Direct)
HesaidtomethatIwas/amhisbestfriend.(Indirect)Hesaidtome,“Youaremybestfriend.”(Direct)
Seemasaidtoherfatherthatshewouldliketobecomeadoctor.(indirect)
Seemasaidtoherfather,“Iwouldliketobecomeadoctor.”(direct)

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 CLASSWORK

Q1 ClassifythefollowingsentencesasSimple,Compound,Complex, orCompoundComplex.

a. Wedecidedtogofishingandcampingoutatthelake
b. Thissummerourvacationshouldbebothexcitingandrestful.
c. Afterthetornadohit,myhouse wascompleteddestroyed.
d. Sincewehadonlyoneplate,wehadtotaketurnstoeatourdinner.
e. LataandSumancookedandservedpeoplethroughtheday.
f. Iwantedtogotothemarkettoday,butthethunderstormpreventedmefromdoingso.
g. The boys have completed the job as promised, so we should give them credit and pay them
ccordingly..
h. The earlier mobile phones were bulky; the latest models, which are sleek, have many more
features.
i. Taxation without representation was a commoncomplainttwo hundred years ago.
j. Snowboardinglookslikefun,butitrequiresalotofpracticewhichisboringanddangerous.
k. BeforeIwasborn,mymotherworkedasareceptionist.
l. Gotothestoreandgetsomemilk,asImusthaveyourcakebakedintimefortheparty.
m. Don’ttellmeyoucan’tfindyourbackpack!
n. Whenyouwererenovating,didyouhirecontractorsordidyoudotheworkyourself
o. Mr.Joneshasalotofbooks,heiswellinformedaboutcurrentevents
Q2 State which of the following are compound and whichare complex sentences. In every sentence,
identify the dependent and independent clauses.
a. Theflashfloodswipedoutthetownbutluckilytherewerenocasualties.
b. Heswamacrossthechannelinfivehoursandsetanewrecordwithhisachievement.
c. Ifyoucannotdothisjob,Iwillasksomeoneelsetodoitforme.
d. Hesaidthathewassounwellthathecouldnotevengetupfromhisbed.
e. A man who serves his fellow human beings personally is more virtuous than a man who only
donatesmoneyforanoblecause
f. Thesoldierswereaskedtocarryouttheorderswhichtheircommanderhadgiventhem.
g. Itisastitchintimethatsavesnine.
h. Neitheristhearchitectureof thehouseappealingnoristheinteriorofthehousedonewell.
i. Hewillcomewhenitsuitshim.
j. Anilnotonlydidhisownwork,but alsohelpedotherscompletetheirs.
Q3 Changethefollowingsentencestoindirectspeech.
a. Hesays,“Kashmiristheheavenonearth.”
b. The Shopkeeper says, “Prices are shooting up alarmingly.”
c. Shesaid, “Nobodycan solve the problem.”
d. Antonysaid, “Martinhasgonehome.”

Chapter-2 : Sentence Types Active - Passive Voice direct - Indirect Speech - 207 -
 e. Shesaid,“Ishallbetakingatest.”
f. Themansaid,“Isyourfatherathome?”
g. Theclerkaskedhismanager,“ShallIemailthisletteragain,Sir?”
h. Shesaid,“Willyoutellmewhatitmeans,David?”
i. Shesaidtome,“Howhaveyoudonethissum?
j. Thepolicemansaidtothestranger,“Whoareyou?”
Q4 Rewritethefollowingsentencesinpassivevoice.
a. Suechangedtheflattyre.
b. Wearegoingtowatchamovietonight.
c. Irantheobstaclecourseinrecordtime.
d. Thecrew paved the entirestretch of highway.
e. Momreadthenovelinoneday.
f. Thecriticwroteascathingreview.
g. I will clean the houseevery Saturday.
h. Thestaffisrequiredtowatchasafetyvideoeveryyear.
i. Shefaxedherapplicationforanewjob.
j. Tom painted the entire house.
k. The Corporation’ssales and Service organizationcovers the country.
l. Weenclosepaymenttogetherwithourorder.
m. The customer should receive the delivery by Friday.
n. Theymayhavenotified him before the invoicearrived.
o. FCSareonly marketing theirnew dental equipment inEurope.
p. Wewouldreducecostsifweusedlesspaper.
Q5 Rewritethefollowingsentencesintheactivevoice.
a. ThecaptainoftheIndiancricketteamwascheeredbythecrowd.
b. Hispaintinghasbeenpraisedbythecritics.
c. Thehorseisbeingpurchasedbythefarmer.
d. The new tax reforms will be implemented fromJuly.
e. Foodfromroadsidevendorsshouldnotbeeaten.
f. By whom has this building been vandalized?
g. Whatwaseatenbyyouforlunch?
h. Theentiredistrictwasdestroyedbythecyclone.
i. Hewillbegivenaticketforoverspeedingbythepoliceocer.
j. Theforestwasgoingtobecutdownforthenewhydroelectricproject4
k. They will be welcomedby the reception committee.
l. Wherewastheferociousmaneatingtigershotdown?
m. Themanwhosavedthechildfromtheburninghousewasbeingcheeredbythecrowdofonlookers.

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 n. Theplacewherehelivedhadbeenconvertedintoahotelbythetrustees.
o. Thefirstfaxmachineswereinstalledin1958.
p. Thesystemscaneasilybeoperatedbyordinaryocesta.
q. Thenewsoftwarecanbemasteredeasilyinacoupleofdays.
r. SoftwareforheadcountisprovidedbySASTRA.
s. Thapacannotbestoppedbyinjury.
t. Seven moviegoerswerebooked in city fordisrespecting nationalanthem.
Q6 Listentospeechesoffamouspersonalities,commentsandsuggestionsbythetopindustrialistsofthe
country. Try to change it into reported speech. This exercise will not only add value but also helps
studentspracticethetopicindiscussion.

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 HOME WORK1

Q1 Readthefollowingsentencesandstatetheirkind.
1. Pleaseleaveyourfootwearoutside.
Declarative
Imperative
Interrogative
Exclamatory
2. Willyouwaithere?
Declarative
Imperative
Interrogative
Exclamatory
3. Wherehaveyoubeenallthiswhile?
Declarative
Imperative
Interrogative
Exclamatory
4. Wewillnottoleratethis.
Declarative
Imperative
Interrogative
Exclamatory
5. Iamyourfriend.
Declarative
Imperative
Exclamatory
Interrogative
6. MysisterlivesinMexico.
Declarative
Interrogative
Imperative
Exclamatory
7. Whatdidyoudothen?
Interrogative
Declarative

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 Imperative
Exclamatory
8. Dobeabitmorecareful.
Declarative
Imperative
Interrogative
Exclamatory
9. Neverspeak tomelikethatagain.
Declarative
Imperative
Interrogative
Exclamatory
10. AlwaysrememberwhatItoldyou.
Declarative
Imperative
Exclamatory
Interrogative
11. Theballrolledslowlyintothegoal.
Declarative
Interrogative
Exclamatory
mperative
Q2 ConvertthefollowingactiveVoiceintopassive
1. Harryatesixshrimpatdinner.
2. Beautiful giraffes roamthe savannah.
3. Tom painted the entire house.
4. The teacheralways answers the students’ questions.
5. Thechoir really enjoys that piece.
6. Whotaughtyoutoski?
7. The forestfire destroyed the whole suburb.
8. Thetwokingsaresigningthetreaty.
9. Thecleaningcrewvacuumsandduststheofficeeverynight.
10. Larry generously donated money to the homeless shelter.

Chapter-2 : Sentence Types Active - Passive Voice direct - Indirect Speech - 211 -
 11. Noonerespondedtomysalesad.
12. The wedding planner ismaking all the reservations.
13. Susanwillbaketwodozencupcakesforthebakesale.
14. Thescienceclass viewed the comet.
15. Whoatethelastcookie?
16. Alex postedthe video onFacebook.
17. The director will give you instructions.
18. Instructionswillbegiventoyoubythedirector.
19. ThousandsoftouristsviewtheGrandCanyoneveryyear.
20. Thehomeownersremodeledthehouse to help it sell.
21. The team will celebrate theirvictory tomorrow.
22. Thesaltwater eventuallycorroded themetal beams.
23. Thekangaroocarriedherbabyinherpouch.
Q3 Completethefollowingsentences.
1. Hesaidthathe.............atoothache.
a. hasgot b. hadgot c. havegot
2. Manusaidthat he....................verybusythen.
a. is b. was c. had been
3. She told us ....................
a. thathurryup b. tohurryup
4. Heasked her ........................him a cup of water.
a. give b. giving c. togive
5. She said that she ...................... going to college.
a. is b. was c. had been
6. Raju said that Gautam.....................to go the followingday.
a. will have b. would have c. has
7. Geetha says that her father ...................... an Engineer.
a. is b. was c. has been
8. He said that he ........................ the physical test.
a. has passed b. passed c. had passed
9. She toldmethat I..................her onlyfriend.
a. am b. have been c. was
10. He toldme that he.................... me.
a. loves b. is loving c. loved
12. James asked Mary .........................
a. where was shegoing b. where she wasgoing c. where hasshegone

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 HOME WORK2

Q1 Change the following sentences into passive voice.

Elizabethwillgiveallbooksto theorphans.
Q2 Rewrite the following sentences in passive voice.
(i) MayGodblessyouwithhealthandhappiness.
Q3 Change the following sentences into passive voice.
(i) My aunt prepares delicious desserts.

Q4 SentenceTypes:ActivePassiveVoice,DirectIndirectSpeech
(A) Change the following sentences into passive voice.
(1) MayGodblessyouwithhealthandhappiness.
(2) RavisentthereportonMonday.
(3) Angelaworeapinkfrockforherbirthdayparty.
(4) Elizabethwillgiveall bookstotheorphans.
(5) My aunt prepares delicious desserts.
(B) Change the following Direct speech into Indirect speech.
(1) Thefanssaid,‘WewantIndiatowin’
(2) TheMinisterannounced,‘OurpartyintroducestheGSTfromtomorrow’
(3) TheBCCIsaid,‘WewishtheUnder19cricketteamfortheitsworldcupwin’
(4) Themasteryelledattheservant,‘Getlostanddon’tshowyourface’
(5) Eldersalwayssay,‘Ifyou work hard,youwillsucceed’.
Q5 Changethefollowingsentenceintoindirectspeech: [Sugg.Nov18]
(i) Suchi asked Sunil, “Are you interested to visit the temple?”
(ii) Changethefollowingsentenceintoindirectspeech:Shalinigaveordertoheryoungersister,
“Gohomeimmediately.”
(iii) Sunitasaid,“Pleasegivemeaglassofwater.”
(iv) Thecaseshouldbehandledbyyoucarefullysinceitiscriticalinnature.
(v) Thedeerwastrappedbythecunningfox.
Q6 Changethe following sentence to indirect speech :
(i) Parisaidtome“IhavebeenlivinginLondonsincelastDecember” . [Sugg.May19]
(ii) Shesaid“Iamwatchingatelevisionshow”.
(iii) Theteacheralwaysanswersthestudents’questions.
(iv) Everynight,theofficeisvacuumedanddustedbythecleaningcrew.
(v) Shesaid“MyFathercameyesterday”.
(vi) TheGrandCanyonisvisitedbythousandsoftouristseveryyear:

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Q7 Change the following sentence to indirect speech:
(i) Thepolicemansaidtothestrangerwhoareyou. [Sugg.May18]
(ii) The Shopkeeper says, “prices are shootingup alarmingly.
(iii) The customer should receive the delivery by Friday.
(iv) Hewillbegivenaticketforoverspeedingbythepoliceofficer.
(v) Theentire districtwas destroyed bycyclone.
Q8 Changethefollowingsentencetoindirectspeech:
(i) Reenasaid.“Nobodycansolvetheproblemontheearth”. [Sugg.Nov19]
(ii) Hesaid,“Willyouallcomeforthemeeting?”
(iii) The audience loudly cheered the Prime Minister’s speech.
(iv) TheBirdwaskilledbyacruelboy.
(v) Hesaid,“MyMotheriswritingletters”.
(vi) Theywill begivenaticketforoverspeedingbythepolice inspector.
Q9 Changethefollowingsentencestoindirectspeech.
(i) Whowrotethisessay? [MTPAPRIL19]
(ii) Sheilasaid,‘HowsmartSeemais’
(iii) Rajeshusesapentosketchfigures.
(iv) Eldersalwayssay,‘Ifyouwork hard,youwillsucceed.’
(v) Workcouldbedonebyusonlybynextweek.
(vi) Teachersaid,‘Pleaseuseabluepenforyour homework’
(vii) ThePrincipalsaid,‘Youareabrightchild’.
Q10 Changethefollowingsentencesintopassivevoice.
(i) Youshouldwrite anapology letter. [MTPMarch19]
(ii) Unclesaid,‘Iamunwell’
(iii) Anita finishedtheworkvery soon.
(iv) “Don’ttrythisathome,”thestuntmantoldtheaudience.
(v) A conservative lifestyle was ledbywomen in olden days.
(vi) Thegirlasked, ‘Where doyou live’?
(vii) “DoessheknowRobert?”hewantedtoknow.
Q11 Changethefollowingsentencetoindirectspeech.
(i) Hadtheycompleted thepaperwork? [MTPOct19]
(ii) “ChineseLanguage isvery difficultto learn.”He said.
(iii) Letitbedonenow.
(iv) “Willtheadministratorreleaseme?Heasked.
(v) Mymothersaidtome,“Willyougoandswimatleastnow.”

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Q12 Changethefollowingsentencesintopassivevoice.
(i) Give first priority to studies. [MTPAug19]
(ii) Thedoctorsaidtothepatient,‘Pleasewait’
(iii) Wecan makeacakeonastove.
(iv) Theytoldme,‘WewerelivinginAssam’
(v) Resultshadtobedeclaredbytheschoolauthorities.
(vi) Theteacherpraisedthegirl,‘Youhavebeenworkinghard’
(vii) Childrensaid,‘Nohomeworktodayplease’
Q13 Change the following sentences into passive voice.
1. Ram loves Sita.
2. Theywillfinish theworkinafortnight.
3. Whydidyourfriendwritesuchamessage?
4. WhotaughtyouCommerce?
5. The examiner will give you instructions. [RTPMay20]
Q14 Change the following Direct Speech into Indirect Speech.
1. Theprincipalsaid,‘youcango’.
2. Ravi said, ‘The lion died in the garden.’
3. Mentorsaidtome,‘youareagoodplayer.’
4. Shesaid, ‘Alas!Iamundone.’
5. ‘Where do you live? Asked the administrator. [RTPMay20]

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Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-218 -
 CHAPTER3
VOCABULARY

INTRODUCTION
AVocabularyisasetoffamiliarwordswithinaperson’slanguage.Itisdevelopedwithage.Servesasuseful
and fundamental tool for communication and acquiring knowledge.
Q1 Whatisvocabulary?
Ans. Theterm‘vocabulary’ isdefinedas‘thebody ofwordsused inaparticular language’. It isalso called
‘wordstock’, ‘lexicon’, and ‘lexis’. Vocabulary consists of the words we understand when we hear or
readthemandwordswespeakorwrite.However,itis‘morethanwords’;itisameasureofallthata
person has learnt, experienced or felt. Vocabulary knowledge requires not only knowledge of word
meaning,butitrequirestheusageofwordsintheappropriatecontextandinanaturalway.
Q2 Whyisarichvocabularyimportant?
Ans. Vocabulary knowledgeis the heart of alanguagecomprehensionand use.
Agoodvocabularyhelpsusunderstandwhatotherpeoplearesayingandwhatwearereading.Unfamiliar
words become holesinthetext,preventingusfromcompletelyunderstandingwhat wehaveGOALS
read.Tocomprehendatextsuccessfullyweneedtohavesufficientwordknowledge.Awriter’smessage
canonlybeunderstoodifthemeaningofmostofthewordsusedinatextisknownbythereader.So,
having alarge amount ofvocabulary knowledge isessential to language comprehension.
a. It gives us the ability to articulate clearly what we mean. Vocabularyhelpsuswithlanguageproduction.
Themorewordsweknowthemorepreciselywecanexpresstheexactmeaningwewantto.Therefore,
wehavetoovercomethelackofvocabularyknowledgeinordertocommunicateeffectively.Vocabulary
knowledge boosts our ability to grasp ideas and think more logically. Thegreaternumberofwordswe
know,the morewecaninterpretideasfromothers,andexpressour ownideas.
b Having a rich vocabulary helps us communicate in a more engaging way. Relyingononeortwowords
todescribeanideawillberepetitiveandnotaspersuasive,asrelyingonavocabularyof1015similarly
descriptive terms.
c It helps us make a good impression on others. How articulate we are constitutes a big part of the
impression wemake on others.
Q3 WhichWordstoLearn
Ans. Aswegrowolderwecomeacrossthousandsofwords.However,notallwordshaveequalimportance
inourlives.Then,howdowedecidewhichwordstolearn?Sincevocabularyknowledgeisnotsomething
that can be fully mastered, we must concentrate on learning words that are of more use to us than
others.Here are somesuggestions:
a Wordsthatareimportanttothesubjectswearestudying.
b Wordsthatwereadorhearrepeatedly.
c Wordsweknowwewillwanttouseregularly.
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Q4 TypesofVocabulary
Ans. Theterm‘vocabulary’hasawiderangeofmeaningsandthusiscanbedividedinmanydifferentways.
Word knowledge is often divided into the following four types: listening, speaking, reading and writing.
1. Listening Vocabulary  Thistypeofvocabularyreferstothewordswehearandcomprehend.Most
adultscanidentifyandcomprehendalmost50000words.
2. Speaking Vocabulary  Thistypeofvocabularyreferstothewordswespeak.Weusebarely10000
words for communication. Thenumber of words used during speaking is far lessthan listening.
Thereasonbehindthisisthelevelofcomfortinusage.
3. Reading Vocabulary  Reading vocabulary refers to the words we recognize when we read any
text.Ifapersonisareaderthenthistypeofvocabularyhappenstobethesecondlargestvocabulary.
Needless to say, vocabulary grows with reading.
4. Writing Vocabulary  Thistypeofvocabularyrepresentsthosewordswhichweusewhilewriting
toexpress ourselves.Ourwritingvocabularyisintensely affectedbythewordswe can spell.

Ithasbeennotedthatourreceptivevocabularyisnormallylargerthanourexpressivevocabulary.For
Example: a child who cannot speak, write or sign can follow quite a number of instructions given in
languagewhichheorsheisusedto.
Q5 Define
1. Synonyms:wordsthathavesimilarmeanings
2. ForeignWords:wordsthathavebeenborrowed fromotherlanguages
3. Connotations:wordsthatinvokeanideaorafeelingwhenreadorheard
4. Antonyms:wordsthatmeantheoppositeofotherwords
5. Collocations:wordsthatareusedtogetheror formfixed relationships

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 6. Idioms:agroupofwordsthathaveameaningdifferentfromtheirliteralmeaning
7. PhrasalVerbs: multi wordverbs
Herearesomepointstorememberinyourquesttoboastofabettervocabulary:
Q6 Whatarepointstobekeptinmindofabettervocabulary?
Ans.
a. Beawareofwords.Donotavoidwordsthatareforeignornewtoyou.Insteadexaminethemclosely.
Evenbeforeyoulookupthemeaningoftheword,youshouldattempttodeduceits meaning from
thecontext.Later,youmayalsocheckthedictionarymeaningofthewordto verify whether your
deductionwascorrect.Donotbeafraidifitslowsdownyourreading initially; eventually, due to your
improved understandingand vocabulary, itwill speed upyour learning ofother words.
b. Readvoraciously.Choosebooks,articles,etc.ofyourinterestandreadregularly.Readingiscrucialfor
vocabulary enhancement since it helps in finding most of the words that are important for
comprehension and expression and must be learnt.
c. Useadictionary.Thedictionaryisanimportanttoolforonewhodesirestoimprovevocabulary.
Whenever you consult a dictionary, you should circle the word you are looking up. You must also
examinetheentireentryabouttheword.Thisisbecausethewordmayhavemorethanonemeaning.
Readingall themeaningswillhelpinunderstanding how tousethewordin differentways.
d. Maintainajournal.Ifyounotedownallthenewwordsyouencounter,youcanrefertothelistlater,study
thewordsandslowlyincludethese wordsinyouractivevocabulary..
e. Usenewwords.Themoreyouusethesewordsinyourwritingandconversations,thesoonertheywill
becomeapartofyouractivevocabulary.
f. Engageinconversations. Simplyengaginginconversationswith otherpeoplecanhelpyou learnand
discover new words.
g. Studynewwordsregularly.Vocabularybuildingisasimpleprocess.Itinvolvesthereviewingofwords
regularlyuntiltheyarexedinone’smemory.Thebestwaytodothisisbyfixingaspecificamountof
timeinourdailyscheduleforvocabularystudy.Duringthistime,youcanstudynewwordsi.e.lookup
their meanings, find their synonyms, or even find their root words. You must also set a goal for the
numberofwordsyouwanttolearn everyday.
h. Gobacktotheroots.Oneofthemostpowerfultoolsforlearningnewwordsandfordecipheringtheir
meaningisstudyingtheirLatinandGreekroots.LatinandGreekelements(prefixes,rootsandsufixes)
areasignificantpartoftheEnglishlanguageandagreattoolforlearningnewwords.
i. Attemptwordpuzzlesandplaywordgames.Ifyouwishtoexpandyourvocabulary,thenplayingboard
games and attempting word puzzles is will help you achieveyour goals. Apart from improving your
critical thinking skills, they also strengthen your word knowledge.
Q7 WhatareConnotations?
Ans. Connotation isdefined as ‘thesuggesting of ameaning bya wordapartfromthe thing it explicitly
names or describes’. The strict, dictionary definition of a word is called its “denotation,” and the
feelingsoremotionsassociated withitaredescribed asits“connotations”.Example:Both‘fat’and
‘chubby’ have a common denotation. Both wordsmean ‘being overweight’, however, most people
would rather be chubby, because “chubby” has more positive connotations and less negative
connotationsthan“fat”does.
Letusexamineanotherexample–home and house. Bothwordshaveacommondenotationabuilding
/ place meant for human habitation. However, the word ‘home’ connotes warmth, family, love and
affiection, whereas the word ‘house’ connotes only a structure of cement and concrete meant for
inhabitation.

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 Importanceofconnotation
(a) Connotationgivesusanindicationoftheemotionsorassociationsthatsurroundaword.
(b) Aword’sconnotationscanbeeitherpositiveornegativeandwilldependonthecontextinwhichitis
used, and to some degree, on the reader or hearer. Therefore understanding a word’s literal and
suggestive meaning is of extreme importance to every speaker and writer. On some occasions, you
maywanttouseawordthatcarriesanegativeconnotationonpurpose.However,therearetimesyou
wanttoensurethatyoudonotmistakenlyuseawordthatcarriesamisleadingconnotation.
Itis ofutmost importancethat wechooseourwordswithcare.Thechoiceofwordscan changethe
meaning of the sentence significantly. For example: Describing a woman who is thin as “scrawny”
carriesanegativeconnotation;whereasdescribingheras“slender” carriesapositiveconnotation.
Letusexamineconnotationsalittlemorecloselybystudyingthegroupsofwordsgivenbelow:
Group Word Tone/Undertone Meaning /Connotation
1 Verbose Negative Containing more wordsthan necessary
Eloquent Positive Vividly or movingly expressive
2 Stench Negative Abadodourorscent
Aroma Positive Apleasantor savourysmell
3 Cheap Negative Apersonwhohatestospendmoney.
Thrifty Positive Aperson who isverycarefulwith money.
4 Young Neutral Apersonwhoisofayoungage.
Youthful Positive Apersonwhomaynotbeyoung,buthasall
thegood qualitiesof youth.
Childish Negative Apersonwhobehaveslikeachildinanegative
way.
5 Proud Neutral To have self respect
Confident Positive To believe in your own abilities
Conceited Negative Tobetooproudofyourabilities.Toview
yourself toohighly.
6 Headstrong Negative Willful and determined; not easily restrained:
impatientwhen given advice or suggestions
Determined Positive Possessing or displaying a rm resolve.
7 Scrawny Negative Exceptionally thinandmeagerinbodyorsize.
Slender Positive Gracefullythin or slight.
8 Crippled Negative Flawed or imperfect
Disabled Neutral Impaired orlimited bya physical, mental,
cognitive, or developmental condition.
Youmusthavenoticedthatthewordsineachgrouphavesimilardenotations;however,eachwordhas
a different connotation.

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Q8 Whatissynonymsandantonyms
Ans.
Wordsthathavesimilardenitionsormeaningsare knownas synonyms.Theseare wordsthat can be
usedinterchangeablywithoutchangingtheintendedmeaningofthemessage.Lookatthetwosentences
given below:
1. Thelong moviebored theviewers.
2. The lengthy movie bored the viewers.
‘Lengthy’ replacedtheword‘long.’ Butthemessageofthesentencedidnotchange,because‘long’and
‘lengthy’aresynonyms;theyhavesimilardenitions.Synonymscangenerallybeusedinterchangeably
withoutachangeinmeaningoftheoverallmessage.However,itmustbeunderstoodthatasynonym
doesnotalwayscarryameaningthatisexactlythesameastheword.Asamatteroffact,notwowords
evermean exactlythe same. There will be subtle differences in emphasis,suggestion oruse.
Example:Takethewords‘cost’,‘charge’and‘fee’.Allareusedtodescribe‘moneyyoupayforsomething’.
However all threehave different connotations / nuances:
(a) Costisdefinedas‘theamountofmoneythatyouneedtobuy,makeordosomething’.(Howmuch
isspent bythe buyer.)Example:
(b) ThetotalcostofthetripwasRs.10,000.
(c) YoucangetanewphoneatthecostofRs.3,000.
(d) Theyprotestagainstthehighcostofliving.
(e) Chargeisdenedas‘anamountofmoneythatisaskedinreturnforgoodsorservices’.(Howmuch
is requested by the seller/provider.)
ThereisamonthlychargeofRs.1000forusingthelift.
Thereisanadmissionchargeattheclub.
(f) Fee is dened as ‘an amount of money that you haveto pay for professional advice or services’.
(the officially set price).
(g) Thelawyerchargesahighfeefortheservicesthatheprovides.
(h) Thesefeesdonotcoveraccommodationormeals.
As you can see, cost, charge and fee have similar meanings, but there are slight differences
present. They can be used slightly differently. Therefore, itcan be said that the words that are
listedinadictionaryassynonymscannotalwaysbeinterchangedinthesamecontext.
Antonymsaredefinedaspairsorgroupsofwordsthataretheopposite(ornearlytheopposite)inmeaning.
Example:Brave istheantonymofcoward.Example:Evil, malicious, bad, and corrupt arealltheantonymsof
good. There arethree types of antonyms: relational, graded and complementary.
(a) Gradedantonymsarepairsofwordswhosemeaningdonothaveanequalweighting.Suchwordpairs
arecalledgradableantonymsastheydonotholdaneitherorrelationship;instead,theyhaveamore
– lessassociation.Typically, theyarepairsof adjectivesthatcanbequalified byadverbs suchasvery,
more, etc.Example: The word ‘fair’ and its antonym ‘dark’ are gradable antonyms. Such words have
gradessuchas‘fairer’,‘darker’or‘lessdark’.Ifsomeoneisnotfair,hemaystillbenotdark.
(b) Complementaryantonymsarepairsofwordsthatareoppositeinmeaningandcannotbegraded.With
complementary antonyms, each word has only one antonym. For example: ‘push’ is the antonym of
‘pull’.

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 (c) Relationalantonymsarewordpairswhereoppositesmakesenseonlyinthecontextoftherelationship
betweenthetwomeanings.Example:borrowandlend;teacherandstudent.Quiteoften,anantonym
canbemadebyaddingaprefix.Forexample:
  likely/unlikely
  symmetrical/ asymmetrical
  entity/nonentity
  decent/indecent
Q9 WhatareAdvantagesofknowingSynonymsandAntonyms
There are numerousadvantagesof knowingsynonyms andantonyms.
(a) Thefirstadvantageonecanidentifyisthatknowledgeofsynonymsandantonymshelpsustoexpress
ideas clearly.
(b) Theselectedwordshouldexpressathoughtorafactprecisely.Example:Abuildingcanbedescribedas
‘dilapidated’ butan automobile cannot asthe wordrefersto buildingsin particular.
(c) Understanding and using synonyms and antonyms is important for not only precise communication,
but to avoid monotony of expression too. Repeatingthe same wordstendsto become boringand
monotonous.
(d) Youshoulduseantonymsandsynonymstoreduceredundancyandtokeepwritingorspeechinteresting
totheaudience. Remember the whole point of languageis to express oneself or tosend a message
effectively.
(e) Inaddition,youcandevelopafullunderstandingofanareaifyoulearnthedifferentsynonymsandthe
connotations that apply to it. Similarly, knowing the antonym of a word increases your ability to
understand and retain the word itself.
Givenbelowisalistofwordswiththeirantonymsandsynonymsforyourreference.
Word Synonyms Antonyms
abhor(v) hate, detest, loathe love, like, admire, relish
bombastic (adj) pompous, loud, flamboyant dull, inactive, lack lustre
cacophony(adj) harsh sound, disagreeable noise euphony, pleasant sound
jovial(adj) cheerful,lively,joyous sad, morose, dull, unhappy
dirty(adj) squalid, filthy, unkempt clean, hygienic, organized
verdant(adj) lush green, grassy, flourishing infertile, barren, dry, parched
destitute(n/adj) needy, poor, incapable rich, affluent, wello”
incite (v) instigate, arouse, stimulate calm down, settle, relax, comfort, resolve
scanty(adj) meagre, dearth, less abundant, plenty, full of
palatial(adj) grand, palace like, elegant earthly, basic, rustic, simple
illicit(adj) unlawful, illegal legal, within law, normal, expected
facile(adj) easy, simple, straightforward dicult, complicated

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Q10 PREFIXANDSUFFIX
Aprefixisaletteroragroupoflettersthatappearsatthebeginningofawordandchangestheword’s
original meaning.
Asuffixisaletteroragroupoflettersthatisusuallyaddedontotheendofwords,tochangetheway
a wordfitsintoasentence grammatically.
Givenbelowarelistsofprexesandsuxeswiththeirmeaningsandwordsmadeusingthem.
Prefix Meaning Samplewords
ambi, amphi both ambiguous, ambidextrous, amphibian, amphitheatre
a without atypical, apathy, aback
ante before antecedents, antediluvian
bene good benevolent, benediction, benign
bi two bicycle, bicameral, biannual
circum around circumference, circumlocution, circumspect
di two dichotomy, diurnal, dilemma
dys faulty dysfunctional, dyslexia
epi on, upon, over epigram, epitaph, epidermal, epicene, epilogue
extra, extro more than, beyond extracurricular, extraterrestrial, extrovert,
extravagant, extraordinary
intra within intravenous, intramural, intra class
inter across interhouse, interval, intermediate
macro big macroeconomics,macrocosm,macrolevel
mis inappropriate,
improper, bad misbehave, misdemeanor, misappropriate, misnomer
mono one monolith, monologue, monogamy, mono acting
multi many multi tasking, multi facet, multilingual, multi level
neo new neonatal, neophyte
omni all omnipresent, omniscient, omnivorous
para related, extension,
beyond paraolympics, paragraph, paraphrase, para gliding
poly many polygamy, polygon, polythene
proto first of itskind,
original protozoa, prototype, protocol
re again,back repeat, restate, restore, rewind, reduce
semi half, partly semifinals, semi conscious, semi circle
super over, above normal,
toomuch supernatural, superstar, superb
tetra four sides tetra pack, tetragon, tetrachloride

Chapter-3 : Vocabulary - 225 -

 trans across, over,
beyond limit trans atlantic, transgender, transfusion, translate
un not, opposite unwilling, unkempt, unusual
suffix meaning sample words
able, ible canbedone (verb) capable, readable, convertible
acy,cy office of, state of,
condition (noun) infancy, privacy, agency
age action, process (verb) pilgrimage, bondage, pilferage
arian person librarian, humanitarian, grammarian
ation state of (noun) refrigeration, occupation, irritation
ectomy surgicalremoval of
(verb) hysterectomy, colectomy, polypectomy
fic making, doing, form
of (adj) beatific, terrfiic, scientific, caloric
iferous bearing, carrying,
producing vociferous, calciferous, lactiferous
ism beliefs, faith,
doctrines (noun) theism,antagonism,regionalism,fanaticism,heroism,baptism,
plagiarism
ist person, one who
believes in racist, theist, misogynist
ine characterized by,
pertaining
to(adj) feline, supine, serpentine
oid resembling to (adj) steroid, anthropoid, ovoid
ose full of (adj) jocose, verbose, lactose, maltose
logy science of,study of biology, geology, zoology, psychology, astrology
ly inthemannerof motherly, fatherly, timely, rarely, beautifully
ship` state of, manner
(noun) friendship, censorship, hardship
osis condition (noun) neurosis, osmosis, psychosis
ster inthe likesof (adj) monster, youngster, prankster
tude state of (noun) attitude, altitude, gratitude
wise by,meansof clockwise, otherwise, lengthwise

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Q11 WhatarePhrasalVerbs?
Ans.
Aphrasalverbisagroupofwordsthatfunctionsasaverb.Itconsistsofaverbthatiscombinedwitha
preposition or adverb or both. The meaning of a phrasal verb is different from the meaning of its
separate parts. The particle (i.e. the preposition or adverb) can change the meaning of the verb
completely. For example:
• passaway–die
• passout–loseconsciousness
• passup–declineanopportunity
Phrasal verbs are used mostly in spoken English and informal texts but they are less appropriate in
formallanguage.Ifyouarewritingaformaldocumentoranacademicessay,trytoavoidusingphrasal
verbs and use more formal alternativesinstead.
Phrasalverbshave to belearnedbecause many of themare idiomatic, and you cannotdeduce their
meaning.
Q12 WhatareAdvantagesofknowingPhrasalVerbs?
Ans.
Spoken English is literally packed with phrasal verbs. So, if you want to communicateeffectively, you
mustlearntousephrasalverbs.Moreover,phrasalverbschangethelanguageandmakeitmorefriendly,
easytounderstandand easyowing.
Another advantage of knowing phrasal verbs is that you can easily substitute a string of longwords
withasinglephrasalverb.Thiswillmaketheconversationnaturalandfluent.Ifyoulearnatleastthe
mostcommonlyusedphrasalverbs,you’lldefinitelyincreaseyouroverallfluencyandunderstanding.

S.No Phrasal Verbwith‘Look’Meaning

1. Lookafter Totakecareof
2. Lookinto Tofindoutmoreaboutsomethinginordertoimprovethe
situation.
To investigate or examine.
3. Lookout To be careful.
To avoid imminent danger.
4. Lookfor Tosearch for somethingorsomeone.
5. Lookthrough To examine something, usually quickly.
6. Lookup Tosearchforinformation(usuallyinabook)
7. Lookupto Torespectoradmiresomeone.
8. Lookaway Toturnyoureyesawayfromsomeoneorsomethingthatyou
were looking at.

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 S.No Phrasalverb Meaning
with‘Bring’
1. Bringabout causeittohappen
2. Bringsomeone round makehimconsciousagain
3. Bringup a)raiseachild;b)causesomethingtobeconsidered;c)vomit
4. Bring down causetobelower
5. Bringoff causetobesuccessful;succeedinanattempt
6. Bringon leadto;helptoproduce
7. Bringout causetoappearclearly;publish
8. Bringin To introduce

S.No. Phrasalverbwith‘Put’ Meaning

1. Putaway placeanobjectinitsproperlocation
2. Putback returnanobjecttothelocationwhereitcamefrom.
3. Putdown • Towrite“onapieceofpaper
• Tocriticizeandhumiliate
4. Put forth/forward Toofferanidea,plan,orproposalforconsideration
5. Putoff • To delay doing something, procrastinate
•ToMakeabadimpression,makesomebodyrepulsedor
disgusted
6. Puton Tostartwearingorusing“
7. Putout • Extinguish“
• Publish“
• Inconvenience someone
8. Putthrough Totransferorconnectsomebodyon thetelephone
9. Put someone up Togivesomebodyaplacetostayatyourhome
Toencourageorpersuadethepersontodosomething
10. Putupwith Totolerate;acceptanannoyingsituationorbehavior
S.No. Phrasalverbwith‘Take’ Meaning
1. Take after To resemble somebody else, usually a family member
2. Takeapart To disassemble something
3. Takeback To admit wrongdoing
4. Take someone in Toallowsomeonetostayinyourhouse
5. Take something in To observe something
6. Take off •Toleavethegroundandfly
•Tobecomepopularorsuccessful
•Toleaveaplacequickly–colloquial

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 7. Take over Totakecontrolofsomething
8. Take up Tobeginasport,hobbyorachallenge
9. Take someone on •Hireoremploysomebody
•Fightorcompeteagainstsomebody
10. Take someone out Gowithsomebodytoarestaurantormovieandpayfortheir
foodorticket
11. Take something out Removesomethingfromaplace
S.No PhrasalVerb Meaning
1. Bearwith someone Be patient with someone
2. Beuptosomething To beinvolvedinsomething strange,aprank
3. Tochangehands Togofromonepersontoanother
4. Tochangecolour To turn pale (usually when caught/guilty)
5. Tocutshort Tosumitall
6. Todoawaywithsomething To discard something
7. Tobeallears Ready to listen
8. Tobealleyes Readytowatch
9. Tofighttoothandnail Tofight everybit
10. Fallapart Break into pieces
11. Fallbackon something Rely on something during emergency
12. Getahead Tomoveahead,getsuccess
13. Getalong Compatibility
14. Toholdgood Tobetrue,valid
15. Hangon Wait for sometime
16. Hang together Get along (two people)
17. Knock into someone Tomeetsomeonebychance
18. Inthelongrun Inthelongterm
19. To leaveforgood Leave forever
20. To mean business Tobeseriousinwhatyousay
21. Offandon Occasionally
22. Playaround Fiddle with things/ Be irresponsible
23. Subject in hand Subject of discussion
22. Uptodate Aware of current happenings
25. Stopover Haltinajourney
26. Bankon Depend on something
27. Getaway Escape,takeabreak
28. Watchout Beaware,becautious
29. Turndown Refuse
30. Wearout To get tired, unstable

Chapter-3 : Vocabulary - 229 -

Q13 WhatareCollocations?
Ans.
Acollocationisafamiliargroupingofwords,especiallywordsthathabituallyappeartogetherandthereby
conveymeaningbyassociation.Forexample,weusuallysay ‘heavyrain’andnot‘strong rain’ or‘bigrain’.
Eventhoughtheyaregrammaticallycorrect,butboth‘strongrain’and‘bigrain’soundcompletelystrange.
Ifyouusethenormalcollocation(‘heavyrain’)yourEnglishwillsoundalotbetterandmorenatural.
Q14 WhydoweneedCollocations?
Ans.
 Makes language interesting and natural.
 Helps adhere to a proper, predecided structure of language.
 Aidsingivingotherbetterformsofpresentationof words.
 Enhances language skills and leads to innovation.
 To some extent beautifies the language.
Q15 WhatareTypesofCollocations
Ans.
1) Noun+Noun
Examples: tea leaf, service industry, single entry,deathcamp,peer group,streetname
2) Noun+Verb
Examples: dogsbark, waterflows,bearsgrowl, pigsgrunt,paperutters, leaves rustle
3) Adjective + Noun
Examples: high fever, burning sensation, blurred vision, sumptuous meal, dwindling prices, critical
analysis
4) Adverb+ Adjective
Examples: completely satisfied, innitesimally small, meticulously studied
5) Verb + Adverb
Examples: performed magically, sang melodiously, read thoroughly, informed repeatedly
Business Related Collocations
Makea profit/loss Sales figures
Security blanket Ceasetotrade
Dollar diplomacy Gobankrupt
Blank cheque Makemoney
Service charge Breakthelaw
Trade route Profit margin
Drawattentionto Opinion poll
Chair a meeting Excise tax
Annual turnover Cash flow

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Q16 HowtolearnCollocations?
Ans.
 Read extensively. While reading books, newspapers we come across use of collocations thatshow us
the proper usage.
 Try andmake differentcollocations. Check for fewcombinations.You mightcome upwithsomething
new!!
 Alwaysrefertoagooddictionarytolookforcollocations.
 Club wordsof acategory.For example, collocationsrelatedtotime, distance, moneyetc.
Think of various collocations possible for a given word. For example, ‘remember’: faintly remember,
vividly remember, distinctly remember, hardly remember.
 Be aware and alert; identify collocations.
Q17 Whatareidoms?
Anidiomisanexpressionthattakesonafigurativemeaning(whencertainwordsarecombined)which
isdifferentfromtheliteralmeaningoftheindividualwords.Examples:“tobeatblackandblue”and“a
hardnuttocrack”.Themeaningoftheseexpressionsisdifferentfromtheliteralmeaningordefinition
of the words of which they are made. Their meanings are however used guratively. They mean
respectively“tobeatverybadly”and“toaverydifficultproblemorsituation”.
Idioms add avor and style to the language. A right idiom used in the right place not only shows the
user’sknowledge butalsoputsforththethoughtmoreconvincingly.Theimportantaspectistoknow
the idioms, their meanings and use them often in language. Article writing, presentations and even
boardroomdiscussionsneedagoodcommandoverlanguagewhichcanbepossiblewithproperuseof
good vocabulary, idioms and phrases.
Letushavealookatafewidiomsandtheirmeanings.
Idioms Meaning Usage
Black sheep Theoddoneinthefamily Theyoungersonistheblacksheepinthe
family.
Abedofroses A comfortable lifewith all Donotexpectlifetobeabedofroses.
luxuries
Tobeatblack
and blue Tobeatverybadly Thepublicbeatthethiefblackandblue.
To blow one’s
trumpet Topraiseoneselfalot Myfriendhasthehabitofblowinghisown
trumpet.
Kithandkin One’s relatives and friends Duringtimesofneed,kithandkinarethe
only help.
Ahardnutto
crack A difficult thing or problem Thelastquestionintheexamwasahard nut
to crack.
A cold reception Unwelcome, indifferent Theguestsfeltbadwhentheygotacold
reception attheparty.
Lion’s share Amajorpart Theeldersontookthelion’s share ofthefamily
wealth.

Chapter-3 : Vocabulary - 231 -

 Otherfishtofry Otherimportantworktodo Pleasebequick,Ihaveothersh to fry.
All and sundry Oneandall Theminister invitedall and sundry tohisson’s
wedding.
Spickandspan Clean, neat and organized Myfriend’sroomisalwaysspick and span.
Asquare meal Complete meal Thepoorinourcountrynditdiculttogeta
square meal leave alone buy luxuries.
TotakeFrench
leave To take leave uninformed Gonearethedayswhenemployeescouldtake
a French leave.
Manofstraw Manofnosubstance Don’t believeyourneighbor,he isa man of
straw.
Aboltfromthe
blue An unexpected disaster Narendra Modi’s demonetization is like a bolt
from the blue forthosedealinginblackmoney.
A fair weather
friend Afriendonlyingoodtimes Ihaveonlyonetruefriend,therestareall
fair weather friends.
Beataroundthe
bush Digressfromthemaintopic Themanagerdoesnotwanthisteam
memberstobeat around the bush, he wantsresults!
Theball isin
yourcourt Your chance;someone Itoldmybossthatifhedoesn’tpaymemore
else’sturntomakeamove money,Iwillleave.Now,theballisinhiscourt
now.
Whole nine yards Allofit;everythingthatis ThemountaintrailwasdicultbutIwantedto
possible gothewhole nine yards.
Keep something
atbay Tostopsomethingthat Agoodwayofkeepingyouranxietiesat bay
couldbeaproblemfor is to meditate.
youfromgettingcloseor
getting worse
Atthedrop
ofahat Immediately, instantly Don’t letNamrita watchthoseemotional
serials;shecriesatthedropofahat.
A herculean task A difficult job Convincingmymothertoletmegoforanight
stayisaherculean task.
Giftofgab Speaking fluently OurEnglishteacher definitelyhasthe gift of
gab, thelistenersare in aweofhisspeech.

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 ROOTSOFWORDS
Thestudy ofthe origin ofwordsandthewayinwhichtheirmeaningshavechanged throughout history is
calledetymology.It determinesthebasic elements,earliest knownuse, andchanges in formand meaning
ofalinguisticform,tracing itstransmission from one language toanother. It also identifies thesimilarities
ofalinguisticform with other languages.
InEnglishgrammar,arootisawordorwordpartfromwhichotherwordsgrow,usuallythroughtheaddition
ofprexfiesandsuffixes.Itistheheartofaword.Example:Therootoftheword‘running’is‘run’.Whenyou
strip o the a xesfromwords,whatisle(withslightspellingmodicaons)istheroot.
Eventhoughtherootisthebasisofanewword,itmaynottypicallyformastandalonewordonitsown.For
example,thewordrejectismadeupoftheprexreandtheLatinrootject,whichisnotastandaloneword.
Understandingthemeaningsofthecommonwordrootscanhelpusdeducethemeaningsofnewwordsthat
we encounter. Henceforth, by elimination technique,students can make the right selection of answer.
Butbecarefulastherootwordscanhavemorethanonemeaning.Inaddition,wordsthatlooksimilarmay
bederivedfromdifferentroots.Sowhenyoumeetupwithanewword,besuretorelyonadictionaryto
check its denition.
Ifwewishtohoneourvocabularyskills,thenwemuststudyroots.Knowledgeoftherootanditsusagewill
improveourvocabularyexponentially.Ifweknowoneroot,anywordwiththatrootwouldbecognizant.So
typically,wedo not’havetositandmug uptheentirewordlist.Thelearningwillhappenitself!!
Givenbelowisadetailedlistofroots,itsmeaningandthepossiblewordsmadeoftheroot.
Roots Meaning Words Meaningofwords
Aer/o Air Aeroplane Vehicle ies in air
Aerospace Airinthespace
Aerate Givewaytoair
aerial Air related like acts,animals
Anthrop Man Anthropology Studyofman
Philanthropy Love for mankind
Misanthrope Hater of mankind
Anthropomorphism AttributinghumancharacteristicstoaGod,
animal, object
Arch First, prime, ruler Archbishop HeadofChurch
Monarch Head of state/King
Archaeology Studyoftherst/originofthings
Biblio Book Bibliophile Loverofbooks
Bibliography List/writings of books
Bible Thebook(Mainbook)
Bio Life Biology Study of life
Biography Writings on life
Biosphere Lifearound us
Cent Hundred Centenary 100yearsanniversary
Percent Per hundred (%)
Century 100years

Chapter-3 : Vocabulary - 233 -

 Cide To kill Patricide To kill father
Matricide To kill mother
Fratricide To kill brother
Genocide Tokillthewholerace
Cracy Torule Democracy Rule of the people
Gerontocracy Rule bytheold people
Aristocracy Rule by the elite
Derm Skin Dermatology Studyoftheskin
Pachyderm Tough skinned
Epidermal Outer layerofskin
Ego Self Egoist Preoccupied with oneself
Egotist Feeling of superiority about oneself
Alterego The other self

Eu Good Eulogize To praise

Euphony Pleasant/good music
Euthanasia Mercykilling,tokillforgood.
Acri Bitter Acrimony Feelings of hatred
Acrid Bitter /foul smell
Tele Far Telephone Means of talking
Telegram Means of writing
Telepathy Feelings felt at distance
Pathos Emotion Sympathy Similar feelings
Apathy Indifferent
Antipathy Opposite feelings/hate
Ject Throwout Reject Discard
Inject Throwin
Eject Bringout
Sect Cutout Intersect Point of crossing
Section Apart
Dissect Cutout
V is To see V ision Eye sight
V isible Canseeornot
Envision See beyond
Vor Eat, Voracious Greedy
eat greedily Carnivorous Flesh eating
Devour Gulpaway
Herbivorous Grass/plant eating
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 Sen Old Senior Experienced due to age
Senate Council of senior members
Senile Mentallyunstableduetooldage
Although,importantrootshavebeendiscussed,thislistisonlyforreferenceastherearemorerootsinthe
English language.

CLASSWORK
A.Exerciseofconnotations
Q1 Categorisethewordsfromeachgroupofwords(andphrases)givenbelowpositive,negativeorneutral.
Thefirstoneisdoneforyouasanexample.
Ans.
1. gaze, look steadily, stare
2. brainwash, persuade, influence one way or another
3. delayed,notontime,tardy
4. somewhat interested, nosy, curious
5. lazily, without haste, leisurely
6. ask ofsomeone, demand, request
7. gathering,alargegroup,mob
8. discuss with others, debate, argue
9. observe, watch, spy
10. assertive, firmly confident, pushy
Positive Connotation Denotation Negative Connotation
1 gaze look steadily stare
2
3
4
5
6
7
8
9
10
Q2 Ineachof thefollowingsentences,theitalicizedwordhasafairlyneutralconnotation.Foreach
wordinitalics,listtwosynonyms(wordswithsimilardenotations):onewithanegativeconnotation
andtheotherwithapositiveconnotation.
1. Irecognizedthe familiarsmell ofmymother’scooking.
2. Siddharth’s interest in painting has turned into a hobby.
Chapter-3 : Vocabulary - 235 -
 3. Vasco was an adventurous traveller.
4. Myold laptophasnallydied.
5. Sneha was mildly intimidated by Gautam’s assertive behavior.
Q3 Readeachofthefollowingsentences.Decidefromthecontextwhetherthespeakerisshowingapproval
ordisapprovalofthetopic.Thenidentifythewordthatmostsuitsthecontext.
1. Thisrefrigeratoris(expensive/overpriced)butSohamdidnotmindpayingextrabecauseofthe
numerous useful features it has.
2. Shiv Tomar and his (cronies / employees) have controlled the management in this company for
over fourteen years now. I wish ArindhamChatterjee iselected President this time.
3. HopefullyIwon’thavetoshareofficespacewithMrs.Singh.Shecanbevery(curious/nosy).
4. PleaseaskRohittoturndownthevolume.Itisdicultformetoconcentratewithallthat(noise/
music).
5. Mr.Nairhadbetterbe waryofhisnew neighbor, Ms.Banerjee; she isa (crafty /clever) one.
6. Ihavegreatrespectforyourbrotherwhoisrather(reserved,antisocial)anddignied.
7. Myfriendcan’tstandhermother–in–lawwhoisvery(thrifty/miserly);shehasalotofmoney
butrefusesto helpothers.
8. The new saleswoman tends to be (enthusiastic, pushy) while dealing with customers. She is
scaring them away.
Q4 Select the correct meaning of the idioms/phrases given below.
1) Bone of contention
(a) Area of agreement (b) Of least importance
(c) Subject of dispute (d) Tobecautious
2) Toruletheroost
(a) To dominate (b) To like eating chicken
(c) Tobeunsure (d) Tobelazy
3) Togreasethepalm
(a) To eat butter (b) To offer bribe
(c) Toswimindeepsea (d) Tobeindeepthought
4) Storminateacup
(a) Crave for something (b) Drink tea often
(c) Getintoquarrels (d) Makeabigissueoutofasmallthing
5) Longfor
(a) Quarrel (b) Yield
(c) Desire (d) Search
6) Penandink
(a) Modernday (b) Extensively
(c) Wastage (d) In writing technology
7) Take after
(a) Follow someone (b) Resemble
(c) Note down (d) Recover

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 8) Afarcry
(a) Shout loudly (b) To break silence
(c) Disappoint (d) Very different
9) Hobson’s choice
(a) Nochoiceatall (b) Lotofchoices
(c) Unanimous  decision (d) Tomakeeyecontact
10) Inthepinkofhealth
(a) Prolonged suffering (b) Emergency situation
(c) Best of health (d) Challenging situation
Q5 Select the suitable substitute for the word in italics in the sentences given below. Ensure that the
meaningofthesentence doesnotchange.
1) Lackofeducationhasretardedthenation’sprogress.
(a) degraded (b) improved (c) slackened (d) conned
2) Thecreamoffersblemishfree skinresults.
(a) oil free (b) flawless (c) colored (d) smiling
3) ThearmycaptainwasawardedtheParamVirChakraposthumously.
(a) secretly (b) liberally (c) after death (d)
formally
4) Themagician’stricksmesmerizedthe audience.
(a) provoked (b) fascinated (c) confused (d) scared
5) Seeingtheartistworkwithsuchfinesse,thecrowdcheered.
(a) Expertise (b) casually (c) authority (d) unwillingness
6) Thematchwasacompletefiascofortheforeignteam.
(a) Shock (b) Learning (c) Win (d) Failure
7) Thedemureactresshaswontheheartsofthepublic.
(a) bold (b) shy (c) versatile (d) legendary
8) Hisparentswereadamantaboutnotsendingtheirsonforatwodaytrip.
(a) poor (b) inflexible (c) willing (d) unfavorable
9) AsluggardwouldbeamistintheArmy.
(a) cheat (b) old (c) talkative (d) lazy
10) Finishingthetenpagehomeworkintwodaysisatediousjob.
(a) easy (b) common (c) tough (d) boring
Q6 Fillintheblankswith themost suitableoption.
1) Ofthetwonewworkers,oneisexperienced,whiletheother isa—————.
(a) renegade (b) novice (c) robust (d) witty
2) The————datacollectedisnothelpfulinanywaytoreachaconclusion.
(a) average (b) flexible (c) erratic (d) commendable
3) Itwasquitehumorous toseethe————minister talkabout healthandfitnessissues.

Chapter-3 : Vocabulary - 237 -

 (a) rotund (b) corrupt (c) angular (d) quarrelsome
4) The————rainfallindesertregionshasledtoariskoffamine.
(a) worthy (b) scanty (c) expensive (d) abundant
5) Thesageisleadinga————lifeinthemountainpeaks.
(a) spiritual (b) boring (c) graceful (d) ghostly
6) ————arrangements were made for the wedding.
(a) handsome (b) annual (c) ostentatious (d) childish
7) Themusicplayedinthefunctionwas————,lotsofpeoplewerecomplainingaboutit.
(a) melodious (b) destructive (c) confusing (d) boisterous
8) To————asecretisnolessthancrimethanlying.
(a) divulge (b) forget (c) hide (d) attach
9) The study of codingdecoding involves various ————clues.
(a) obvious (b) cryptic (c) healthy (d) verbose
10) Therichbusinessmanhasdonated a————amountfromhissavings.
(a) colossal (b) agrarian (c) ultimate (d) cowardly
Q7 Inthe followingquestions choose the wordwhich bestexpresses themeaningofthegivenword.
(1) Obliterate
(a) Differ (b) Suffer (c) Destroy (d) Forget
(2) Myriad
(a) Many (b) A disease (c) Dramatic (d) Confusion
(3) Perpetual
(a) General (b) Emotional (c) Stubborn (d) Continuous
(4) Fissure
(a) Opening (b) Big (c) Tofetch (d) Excite
(5) Despot
(a) Tyrant (b) Storage (c) Hotmeal (d) Against
Q8 Selectasuitableantonymforthewordgiveninquestion.
1) Remorse
(a) Split (b) Jovial (c) Careless (d) Pity
2) Disparage
(a) Eulogize (b) Belittle (c) Alert (d) Defame
3) Vex
(a) Wordy (b) Verify (c) Annoy (d) Amused
4) Novice
(a) Beginner (b) Spin (c) Experienced (d) Absolute
5) Propriety
(a) Indecency (b) Charming (c) Property (d) Appropriate

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-238 -
Q9 In each sentence below, underline the word that means the opposite of the italicized word. Then,
identify meaning of the italicized word from the options given below.
1. Many people have pointed out the harmful effects that a working mother may have on the
family,yet there are many salutary e”ects as well.
a. wellknown b. benecial c. hurtful
2. Tryingtocontroleverythingyourteensdocanimpede theirgrowth.Toadvancetheirdevelopment,
allowthemtomakesomedecisionsontheirown.
a.hamper b. predict c. improve
3. During their training, police ocers must respond to simulated emergencies in preparation for
dealing with real ones.
a. madeup b. mild c. actual
4. “I’ve seen students surreptitiously check answer sheets during exams,” said the professor.
“However,untiltodayIneversawoneopenlylayoutacheatsheetonhisdesk.”
a. legally b. secretly c. loudly
5. In formal communication, be sure to avoid ambiguous language. Clear language prevents
confusion.
a.wordy b. ineffective c. unclear
Q10 Makenew wordscombining the root word and one of the following prefixes. Each is used twice. de
overantipredis
1.___place 2.___code
3.___vent 4.___social
5.___obey 6.___act
7.___septic 8.___age
9.___pend 10.__serve
Q11 Choosethecorrectmeaningsofthegivenrootwords:
1. Duo
a. one b. two c. three d. four
2. Aud
a. light b. air c. sound d. water
3. Biblio
a. vehicle b. college c. school d. book
4. Ced
a. eat b. go c. sleep d. wake
5. Ego
a. other b. together c. another d. self
Q12 Useaprefixtofindtheoppositeofthegivenwords:
a. wrap b. connect c. behave d. fold e. spell
Q13 Complete the following sentences by using the appropriate form of the word given in the bracket.
(Addaprefixorasuffix)

Chapter-3 : Vocabulary - 239 -

 1. Theteamhesupportedwasabletowinthe_____________.(champion)
2. Ithinkthatyoushould_____________yourdecision.Itmaynotbethebestthingtodo.(consider)
3. TheCEOhasbeenresponsibleformany_____________decisions.(popular)
4. His_______commentsmadehimdislikedby thefemaleemployees.(sex)

5. ___________ofspeechandbeliefisextremelyimportantforthehealthofanindividual.(free)
6. SomeTVshowsarecompletely____________forchildren.Theymustn’twatchthem.(suitable)
7. Thepartywas_________________,everythingwentwrong.(disaster)
8. Theyhadto__________________thelionbeforetheycouldcatchit.(tranquil)
9. Heneededto__________________thetemperature.(regular)
10. Youneeda_______________ofmotivation,organizationandrevisiontolearnEnglish.(combine)
Q14 Eachsentencegivenbelowcontainsanincompletephrasalverb.Completetheexpressionbysupplying
asuitableprepositionoradverbparticle.Chooseyouranswerfromtheoptionsgiveninthebrackets.
1. AllMaria’srelativesareoftheopinionthatshetakes___________hergrandmother.
(after / off/in)
2. Themusicistooloud.Couldyouturn____________thevolume,please?
(back/down/up)
3. Quick,get___________thebusoryouwillhavetowalkhome.
(on/under/over)
4. Wewilltakethisissue……………………….whenwemeetnextweek.
(up/on/over)
5. Iamafraidthatwehaverun_______ofjuice.Willyoudrinkcoffee?
(with, out, away)
Q15 Complete the following sentences by filling in the blanks with suitable phrasal verbs.
(i) Ithoughttheconferencewasgoingtobeboring,butit______________________tobequiteuseful.
(ii) He________________thekitchenandmadesometea.
(iii) Thepolicehavebeenlookingforhimeverysincehe____________________oftheprison.
(iv) Weleftanhourearlierbutwedrovesofastthatwewereableto_________________withhim.
(v) ThePresidentaskedthemembersoftheCabinetto____________________theirlettersofresignation
Q16 Trytoformcollocationsforthegivenwords.
Ans.
(a) —————sun
(b) —————ice
(c) —————meeting
(d) —————completely
(e) ——————pain
(f) ———————freedom
(g) ———————rule
Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-240-
 (h) ——————decision
(i) ————————unit
(j) ————————wind
(k) ————a presentation
(l) ————an argument
(m) ———— time
(n) ————a meeting
(o) Burst into ————
Q17 Identifythe idiomin the given sentences and determinethe meaning fromthe context.
Ans.
1. Iknowthatthefightthattheyhadyesterdayseemedserious,butthat’sjustthetipoftheiceberg.
2. Icalledinsickallweekbeforethesummervacation,butnowIhavetofacethemusic.
3. Tarajumpedonthebandwagonandgotherear piercedafterall ofherclassmatespiercedtheir
ears.
4. Tommy’smotherdidn’tevenlecturehimafterhecamehomelateagain;itwaslikebeatingadead
horse.
5. WhenMrs.Banerjeetoldthestudentsthatshewasgoingtosharetheanswers,theywereallears.
6. Whilethebosswasaway,thetwoworkersdecidedtoshootthebreezeoveracupofcoffee.
7. Dadwantedtoletmeoffthehook,butmomsaid,“Hemadehisbed.Nowhehastolieinit.”
8. Youknewtherewasnoanswertothisproblem,yetyousentmeonawildgoosechase.

Chapter-3 : Vocabulary - 241 -

 HOME WORK1
Q1 Writethesynonymsforeachofthegivenwordbelow.

WORD
1. Abnormal ____________________
2. Able ____________________
3. Abundant ____________________
4. Candid ____________________
5. Cold ___________________
6. Cogent ____________________
7. Hazardous ____________________
8. Joy ____________________
9. Negligent ____________________
10. Rare ____________________
11. Scandal ____________________
Q2 Writetheantonyms for each of the given word below.

WORD
1. ability ____________________
2. Able ____________________
3. Accept ____________________
4. Agree ____________________
5. Bad ____________________
6. Bankrupt ____________________
7. Beautiful ____________________
8. Begining ____________________
9. Bright ____________________
10. Care ____________________
11. Cold ____________________
12. Cheep ____________________
13. Danger ____________________
14. Decrease ____________________
15. Deep ____________________
16. Distance ____________________
17. Dry ____________________
18. Early ____________________
19. Economical ____________________
20. Emigrant ____________________
21. Encourage ____________________
Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-242 -
 22. Explicit ____________________
23. Exit ____________________
24. Fact ____________________
25. Failure ____________________
26. Fair ____________________
27. Fashionable ____________________
28. Fast ____________________
29. Female ____________________
30. Flexible ____________________
Q3 Write the prefixes and suffixesof the following
1. ante (before)
2. extra (outside/beyond) 
3. inter (between)
4. post (after/behind)
5. out (outside)outdoor, out
6. over (outer/above)
7. super (above)
8. ultra (beyond/extreme)ultraviolet, ultra
9. under (below/too little/subordinate)
Theyare
10. mega (very large)
11. mini (small)
12. ex (former)
13. re (again)
14. uni (one)
15. co (joint)
16. eco (abbreviation of ecology)
17. Euro (abbreviation of European)
18. ment (means or result of an action)arrangement, embarrassment, curtailment, bewilderment
ness (a state or condition)usefulness, carelessness, willingness, kindness,wilderness
19. Ship (quality or condition, status, tenure, skill, etc.)scholarship, companionship,.

Chapter-3 : Vocabulary - 243 -

 HOME WORK2
Q1 Choosetheappropriatewordtofill theblank:
Thescamwasbasicallybecauseof______________________offundsbytheseniormembersofthe
organization.
(a) Misappropriation (b) credibility (c) Movement (d) Allotment
Q2 Choosethewordwhichbestexpressesthemeaningofthegivenword. Recede
(a)Moveback (b)Accept (c)Deviate (d)Agree
Q3 Selectasuitableantonymfortheword giveninquestion.Inept
(a)  Aptitude (b)Longlasting (c)Inappropriate (d)Skilled
Q4 Choosethewordwhich bestexpressesthemeaning ofthegivenword.Stimulate
(a) Effects (b) Activate (c) Irritate (d) Captivate
Q5 Selectthesuitableantonymforthegivenword:Cyclical
(a) Recurrent (b) Unidirectional (c) Appearing (d) Vehicular
Q6 Selectthecorrectmeaningoftheidioms/phrasesgivenbelow.
Foodforthought
(a) Incomplete information
(b)  Good knowledge
(c)Uncensoredwords
(d) Baselessfacts.
Sell like hotcakes
(a)Adifficultcampaign
(b)  Controversial marketing
(c)Goodbaker
(d)Fastselling/inhugenumber.
Q7 Select thesuitable synonym forthegiven words:
(1) Concise
(a) Important (b) Better (c) Precise (d) Interes ting
(2) Ill will
(a) Sad (b) Lazy (c) Good will (d) Hatred
(3) Stimulate
(a) Effects (b) Activate (c) Irritate (d)Captivate
(4) Recede
(a) Moveback (b) Accept (c) Deviate (d)Agree
(5) Exorbitant
(a) Light (b) Exclusive (c) Enormous (d) Easy
Q8 Selectthesuitable antonymforthegivenword:
(1) Cyclical
(a)Recurrent (b) Unidirectional (c) Appearing (d)Vehicular
(2) Inept
(a) Aptitude (b) long lasting (c) Inappropriate (d) Skilled

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-244 -
 (3) Cumbersome
(a) Manageable (b) Clumsy (c) Quantitative (d) Moderate
(4) Drastic
(a) Severe (b) Useless (c) Forceless (d)Emergency
(5) Tangible
(a) Limited (b) Impalpable (c) Thematic (d) Peaceful
Q9 Selectthecorrectmeaningofthegivenidioms:
(1) Foodforthought
(a) Incomplete information
(b) Good knowledge
(c) Uncensored words
(d) Baseless facts
(2) Sell like hotcakes
(a) A difficult campaign
(b) Controversial marketing
(c) Goodbaker
(d) Fastselling /inhugenumbers
Q10 Fillintheblankswiththe mostsuitablechoice:
(1) Thejudgeorderedadeathsentencewhentheaccusedwasfound_______________
(a) Transparent (b)Abusing (c) Culpable (d)Empirical
(2) Hisfirstmovewasto______________theenemyteamandthenbeheadeachone.
(a) Announce (b) Seize (c) Complete (d) Harvest
Q11 Choosethewordwhichbest expressesthemeaningofthegivenword: Proficient
(1) Regular (2)Expert (3) Weak (4) Reserve
[Sugg.Nov18,1Mark]
Q12 Selectasuitableantonymforthefollowingword:Support
(1) Disturb (2) Attend (3) Oppose (4) Attack
[Sugg.Nov18,1Mark]
Q13 (i)Choosethewordwhichbestexpressesthemeaningofthegivenword: Fiction
(1) Fantasy (2) Story (3) Fact (4) Reality
(ii) Demote
(1) Rise (2) Upgrade (3) Decline (4) Downgrade
[Sugg.Nov18,1Markeach]
Q14 Fill up the blank with the most suitable preposition or adverb given in the brackets.He
apologized_______histeacherforhismisbehaviour.(to/from/with/against)
[Sugg.Nov18,1Mark]

Chapter-3 : Vocabulary - 245 -

Q15 Select the correct meaning of the following idioms/phrasesamong the alternatives given below
(i) Outoftheblue
(1) Something happens that was unexpected.
(2) Something happensthat was very much expected.
(3) Fromthesky
(4) FromtheOcean
(ii) Dayinanddayout
(1) Comingandreturningindaytime (2) Thedayofimportance.
(3) Continuously (4) Withinaday [Sugg.Nov18,1Markeach]
Q16 (i)Choosethewordwhichbestexpressesthemeaningofthegivenword:Crooked
(1) Straight (2) Tapering (3) Twisted (4) Circle
[Sugg.May19,1Mark]
(ii)Selectasuitableantonymforthewordgivenunder:Predicament
(I) Injury (2)Ease (3) Accident (4)Horrifying
[Sugg.May19,1Mark]
Q17 Choosethewordwhichbestexpressesthemeaningofthegivenword:
(i)Reckless
(1) Cautious (2)Clear (3) Careless (4)Fearless
(ii)Humongous [Sugg.May19,1Markeach]
(1) Minute% (2)Huge (3) Hungry (4)Hassel
Q18 Selectthecorrectmeaningofidioms/phrasesgivenbelow:
(i) Cry over spilled milk [Sugg.May19,1Mark]
(1) Drain milk
(2) Complain aboutsomethingthat cannotberectified
(3) Getintoaltercation withsomeone.
(4) Misbehave with someone
(ii) Judgeabookbyitscover.
(1) Readingabook
(2) Todetectafraud
(3) Relyon outwardappearances
(4) Tobe intimated by appearances
(iii) Choosethewordwhichbestexpressesthemeaningofthegivenword:Mesmerized
(1) Enthrall (2)Gruesome (3) Scary (4)Harmony
[Sugg.May19,1Markeach]

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-246 -
Q19
(i) Choosethewordwhichbestexpressesthemeaningofthegivenword:Perpetual

(1) General (2) Emotional (3) Stubborn (4) Continuous

(ii) Selectasuitableantonymforthewordgiveninquestion: Disparage
(1) Eulogise (2) Belittle (3) Alert (4) Defame
[Sugg.May19,1Markeach]
Q20 Choosethewordwhichbestexpressesthemeaningofthegivenword:
(i) Despot
(1) Tyrant (2) Storage (3) Hotmeal (4) Against
(ii) Illicit [Sugg.May18,1Markeach]
(1) Storage (2) Emotional (3) Unlawful (4) Grand
Q21 Completetheexpressionbysupplyingasuitableprepositionoradverbparticle.Chooseyouranswer
fromtheoptionsgiveninbrackets.
Wewilltake__________thisissuewhenwemeetnextweek.(up/on/over) [Sugg.May18,1Mark]
Q22 Selectthecorrectmeaningofidioms/ phrasesgiven below:
(i) Storminteacup
(1) Crave for something (2) Drink tea often
(3)Getintoquarrel (4) Makingabigissueoutofasmallthing.
(ii) Togreasethepalm
(1) Treat suffer (2) To offer bribe
(3) Toswimindeepsea (4) Tobeindeepthought. [Sugg.May18,1Markeach]
Q23 (i)Choosethewordwhichbestexpressesthemeaningofthegivenword:Abundant
(1) Plentiful (2) Sufficient (3) Enough (4) Many
(ii) Selectasuitableantonymforthewordgivenunder:Adumbrate
(1) Elaborate (2) Summarize (3) Angry (4) Happy
[Sugg.Nov19,1Markeach]
Q24 (i)Choosethewordwhichbestexpressesthemeaningofthegivenword: Relevant
(1) Related (2) Important (3) Pertinent (4) Common
(ii)Choosethewordwhichbestexpressesthemeaningofthegivenword: Unabashed
(1)Notfast (2) Not Finding (3) Not Embarrassed (4) NotAngry
[Sugg.Nov19,1Markeach]
Q25 Select the Correct meaning of Idioms/Phrases given below:
(i)TakesTwotoTango
(1) Two people arerequired for dancing
(2) Two people are required for creating mischief.
(3) Two people required to clean floor.

Chapter-3 : Vocabulary - 247 -

 (4) Two people required to help others.
(ii)Storminateacup
(1) Crave for something
(2) Least importance
(3) Emergency situation
(4) Makeabigissueoutofasmallthing.
(iii) Choosethewordwhichbestexpressesthemeaningofthegivenword.Myriad
(1) Dramatic (2) ToFetch (3) Many (4) Confusion
[Sugg.Nov19,1Markeach]
Q26 (i)Choosethewordwhichbestexpressesthemeaningofthegivenword. Contingency
(a) Existence (b) Evidence (c) Rebel (d) Emergency
(ii) Selectasuitableantonymforthewordgiveninquestion. Proximity
(a) Approximation (b) Assumingly (c) Remoteness (d) Cure
[MTPApril19,1Markeach]
Q27
(i) Choosethe wordwhich bestexpressesthemeaningofthegivenword.Inherent
(a) Intrinsic (b) Inevitable (c) Innovation (d) Intent
(ii) Choosetheappropriateantonym(opposite)fortheword: Serene
(a) Valley (b) Young (c) Unrest (d) Harmless
[MTPApril19,1Markeach]
Q28 Selectthesuitableantonymforthegivenword:Vigilant
(a) Careful (b) Curious (c) Concerned (d) Inattentive
[MTPApril19,1Mark]
Q29 Select the correct meaning of the idioms/phrases given below.
(i) Acid test
(a) Difficult job (b) Useless task (c) Decisive test (d) Unknownwork
(ii) Sell like hotcakes
(a) A difficult campaign (b) Controversial marketing
(c) Goodbaker (d) Fastselling/inhugenumbers
[MTPApril19,1Markeach]
Q30
(i) Choosethewordwhichbestexpressesthemeaningof the givenword. Embezzle
(a) Shine (b) Steal (c) Busy (d) Shocked

(ii) Selectasuitableantonymforthewordgiveninquestion. Applaud

(a) Organize (b) Compose (c) About (d) Condemn
[MTPMarch19,1Markeach]

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Q31
(i) Choosethewordwhichbest expressesthemeaningofthegivenword. Divulge
(a) Diginto (b) Varied (c) Reveal (d) Deep
(ii) Choosetheappropriateantonym(opposite)fortheword: Cumbersome
(a) Manageable (b) Clumsy (c) Quantitative (d) Moderate
(iii) Selectthesuitableantonymfor thegivenword: Concealed
(a) Tohide (b) Uninteresting (c) Known (d) Related
[MTPMarch19,1Markeach]
Q32 Select the correct meaning of the idioms/phrases given below.
(i) Facethe music
(a) Escapefromthe situation
(b) Act violently
(c) Enjoy the music
(d) Face the challenges/ consequences
(ii) Foodforthought
(a) Incomplete information
(b) Good knowledge
(c) Uncensored words
(d) Baseless facts [MTPMarch19,1Markeach]
Q33
(i) Choosethewordwhichbestexpressesthemeaningofthegivenword.Quixotic
(a) Pragmatic (b) Mundane (c) Utopian (d) Sane
(ii) `Selectasuitableantonymforthewordgiveninquestion. Nebulous
(a) Sullen (b) Dismal (c) Definite (d) Gist
[MTPOct19,1Markeach]
Q34
(i) Choosethewordwhichbest expressesthemeaningofthegivenword. Stolid
(a) Stain (b) Strafe (c) Stork (d) Stoical
(ii) Choosetheappropriatewordtofill theblank:
studentsneedtobe aware ofthesignificanceofcollocation.
(a) Solipsistic (b) Inchoate (c) Advanced (d) Minger
[MTPOct19,1Markeach]
Q35 Selectthesuitableantonymforthegivenword:Flamboyant
(a) Colourful (b) Modest (c) Sporty (d) Actor
Q36 Selectthecorrectmeaningoftheidioms/phrasesgivenbelow.
(1) Forgood
(a) Sometimes (b) Permanently (c) Occasionally (d) Usually
(2) Righthand man
(a) Faithful (b) Punctual (c) Hardworker (d) Most efficient assistant
[MTPOct19,1Markeach]

Chapter-3 : Vocabulary - 249 -

Q37
(i) Choosethewordwhichbestexpressesthemeaningofthegivenword.Fraught
(a) Scam (b) Smelly (c) Rare (d) Full of
(ii) Selectasuitableantonymforthewordgiveninquestion.Adamant
(a) Resolute (b) Steadfast (c) Flexible (d) Extinct
[MTPAug19,1markeach]
Q38 (i)Choosethewordwhichbestexpressesthemeaningofthe givenword. Peroration
(a) Conclusion (b) Audience (c) Cheating (d) Priority
(ii) Choosetheappropriatewordtofill theblank:
Withtheeconomygoingdown,peoplewhoarerichmightbecome_____________
(a) Endemic (b) Healthy (c) Destitute (d) Considerable
[MTPAug19,1Markeach]
Q39 Selectthesuitableantonymforthegivenword: Acquisition
(a) Forfeit (b) Revival (c) permission (d) Fulfilment
[MTPAug19,1Mark]
Q40 Select the correct meaning of the idioms/phrases given below.
(1) Amanofaction
(a) Full of aggression
(b) Onewho performs
(c) Insubstantial person
(d) Moretalksthanaction
(2) Facethe music
(a) Escapefromthe situation
(b) Act violently
(c) Enjoy the music
(d) Face the challenges/ consequences [MTPAug19,1Markeach]
Q41 Selectthesuitablesynonymforthegiven words.
1. Indispensable
a. Decisive b. Crunchy c. Responsible d. Momentary
2. Hypocrisy
a. Signifier b. Cant c. Sauna d. Gunky
3. Trudge
a. Skip b. Expel c. Review d. Slog
4. Conservatism
a. Behaviourism b. Cognitivism c. Toryism d. Innateness
5. Besmirch
a. Tolley b. Sully c. Honour d. Enhance [RTPMay20]

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Q42 Selectthesuitableantonymforthegiven words.
1. Abstention
a. Orgy b. Binge c. Spree d. Obscure
2. Harmony
a. Hilarious b. Imbroglio c. Complexity d. Separation
3. Vague
a. Disgrace b. Distribution c. Cogent d. Credit
4. Shoddy
a. Careful b. Poor quality c. Former d. Stimulus
5. Pliant
a. Ditch b. Biddable c. Docile d. Inflexible [RTPMay20]

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 CHAPTER4
COMPREHENSIONPASSAGES

INTRODUCTION
Readingcomprehensionistheabilitytoreadtest,processitandunderstanditmeaning.Itmeans
understandingwhattheauthorofthepassagesaysinthepassage.
Q1 WHATARESTRATEGIESFORATTEMPTINGCOMPREHENSIONPASSAGES
Strategiesforattemptingcomprehensionpassages
1. Readthepassagequicklytounderstandthemainidea.
2. Itisadvisabletounderlinethemainpoints,identifyingkeywordsandstatements,whilereading
the passage.
3. Scanthroughall the questions.
4. It is beneficial to underline the detail/ information asked for in the questions to avoid
misinterpretation of the question.
Example:What did Rohan seek while climbing the mountain?
Underliningbringsclarity……theanswershouldbebasedontheobject/emotion/stateofmind
soughtbyRohanand not difficultiesfacedwhile ascendingthe mountainetc.
5. Reread the passage, marking the specific information related to questions.
6. There is often ambiguity in the answers provided in multiplechoice questions. Many a time,
studentsfeelthattwoanswers are appropriateinthecontext.However,therewillalwaysbene
differences.Oneanswermaybeincompletecomparedtoanother,ortheinferencemaybevaried.
Therefore, reread and choose carefully.
Examplerefertosamplepassage3,Q1.
Q.1.Weloseprivacyonsocialnetworkingsitesbecause
a) Weputmanyphotographsonthesite.
b) Sitesrequireustoshareagreatdealofourpersonalinformation.
c) We choose wrongfriends.
d) Youngsters are generally careless.
In the question all options seem to be valid. However, when you go through the passage
again,yourealizethat(b)isthecorrectanswerincontextofthepassage.
7. Sometimes readers feel none of the given choices answer the question. Again, it is reiterated
that reread and choose carefully.
8. Finally, review before you move on to the next question.

Chapter-4 : Comprehension Passages - 255 -

 BLOOMSTAXONOMY
Blooms taxonomygivesthestudentsanideaofhigherandlowerorderthinkingskills.Thestudentswill
betestedonallareasdepictedinthepyramid.

Source: Vanderbilt University Centre for Teaching

TYPESOFQUESTIONS
Areadingcomprehensionpassageattemptstotestastudent’sreadingskills,andabilitytorecall,understand,
apply,analyze,evaluateandcreatecontentbasedonthepassage.Avarietyofquestionsareframedtocover
theabovelisted areasofBloom’staxonomy.Thefollowingareexamplesof thetypesofquestionsthatare
based onthepassage.
 Askingspecificdetailsfromthecontent/bodyofthepassage rememberandunderstand.
 Determiningthemeaningofwords/phrases/idiomsusedinthepassage(fromthecontext)understand
andapply.
 Drawinginferences andconclusions  analyze, evaluate.
 Identifyingthetone ofthespeaker/author/passageevaluate.
 Mainidea/themeofthepassageunderstand,apply,evaluate.
 Suitabletitleforthepassageunderstand,evaluate,create.
Q2 HowtoImproveReadingSpeed
Readinganytextisoftenachallengeformanypeople,especiallyifitisnotyourmothertongue.
Severaltechniquescanbeappliedtoimprovereadingspeed.
1. Readearlyintheday/orwheneveryouarethemostreceptive,andinaquietenvironment.

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 2. Donotreadaloud.Ithampersspeed.
3. Sometimesitisbeneficialtocoverthetextyouhavealreadygonethroughtopreventyoureyesfrom
straying to the previously read content.
4. Set a speed faster than you can understand. You may not comprehend the material at first, but stay
focused onthe text,andkeep your eyes moving. Set yourself a time limit.Gradually your speed will
increaseand you willbegintocomprehend thetext.
5. If you want to get a gist or general idea of a text, a newspaper/ magazine article, or prepare for an
examination, skimming through the subject matter helps. However, reading the text in detail is the
onlywaytogetacompleteunderstandingofanywrittenmaterial.
6. Readthemainandsubheading,tabularmaterialandtableofcontentstogetanideaoftheinformation
containedinthetext.Anideaofthecontentincreasesreadingspeed.
7. Ithelpsinreadingthebeginningandendofanytext,article,paragraphetc.Readingthefirstandlast
paragraphsandlines givesanideaofthecontent.Ifyouarefamiliarwithit,readingbecomesfaster.
8. Underline/highlightimportantwordsinthetext.Ithelpsinpickingouttheimportantaspectsandmark
crucialareasofthesubject.Italsohelpsbuildvocabulary.
9. Itisagoodstrategytopracticeoftenandtimeyourreadingspeed.Timeyourselfeachtimeyouspeed
read.Trytoimproveyourspeedeachtime.Youcantrythefollowingmethod.
 Getanideaofnumberofwordsinapagebycountingthewordsinalineandthereaftermultiply
itwithnumberoflinesin thepage.
 Putatimelimitforyourself,sayhalfanhourandcheckhowmuchtextyoucancoverinthattime.
 Use simple mathematics of multiplying the number of pages/ words by the time taken to read
themtoassessyourreading speedperminute.
10. You have to set yourself a target of the time and pace which you want to achieve in improving your
readingspeed.Adoptingthestrategiesmentionedabovewilldefinitelyhelpyouimprove.Sometimes
peopleevendoubletheirspeedinafewweeks.Selfmotivationandregularpracticeisthebestwayto
attainyourgoal.
The varied speed at which people read are classified as follows:

 Anindividualaged12oraboveissupposedtoread200–250wordsperminute.
 College students generally read at 300wpm.
 If you’re reading 450 wpm, you will be skimming the text for main points. At this speed, you
shouldbeabletounderstandalmostthecompletetext.
 Areadingspeedof600–700wpm,isusedforlookingforsomespecificinformationinatext..Most
peoplecanlearntoreadatthisspeedwithabout75%oftheirnormalcomprehension.
 At 1,000 wpm and above, you’re reaching the level of competitive speed readers. This usually
requiresextremetechniquesthatskipovermostofthetext.Mostpeoplecan’tremembermuch
at this speed.
Tips
 Takeabreakafterabouthalfanhour.Thishelpstoremainfocusedandreduceeyestrain.
 Practicing in a place that is quiet with no distractions and which is well and ventilated is
recommended.
 Don’tchangethetextyouarereadingtoooften.Itmakescomprehensionandmaintainingreading
speed difficult.

Chapter-4 : Comprehension Passages - 257 -

 Â Makesureyourspeedreadingisnothamperingyourunderstandingofthetext.
 A fresh mind and ability to concentrate is a pre requisite for reading important texts. Some
people function well in the morning, while others think better in the afternoon or evening.
QHOWTOENHACEVocabularyEnhancement
Learningnewvocabularyisnevereasy.Herearesomesuggestionstoenhanceyourword power.
1. Readingextensivelywhetheritismagazines,newspapers,novelsoranyothertextsexposesyoutoa
widerangeofvocabulary.
2. Useadictionaryorthesaurustolookupmeaningsofnewwords.Youwillalsocometoknowwhich is
themost appropriateinthecontext.
3. Readmaterialthatinterestsyou.Itstrengthenswordassociationsandmeanings.Forexample,reading
engagingstorieshelpslearnersbuildemotionalandsensorycontextsaroundnewvocabulary.
4. Learngroupsofwordsthatcometogether.E.g.Itiseasiertomemorizeandrecallflockofsheep’than
just ‘ flock’.
5. Itisimpossibletomemorizeallthewordswecomeacross.Onewaytoenhancevocabularytoputthe
wordsyouwishtomemorizewhereyouwillseethemfrequentlyonawall,computer(makeityour
screen saver), on desktop, notebook anything you will view frequently.
6. Asuccessfulwayofbuildingvocabularyistomakeassociationswiththewordwhichyouwillalways
recall,forexample‘gigantic’,linkingittothehugeGodstatueinyourvicinitywillalwayshelpremember
the meaning.
7. Manyexpertsadvicethattobuildvocabulary,‘learnadedicatedmemorizationstrategythatuses some
form of mnemonics (a system such as pattern of letters, ideas, or associations which assists in
remembering something’).
8. Lastlydedicationandperseverance,ofcourse,playakeyroleintheefforttobuildalarge,comprehensive
vocabulary.

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 CLASSWORK

Passagesofdifferinglengthsandarangeoftopicshavebeenincludedtoexposestudentstovariedtypesof
content.
Q1 Readthepassagecarefullyandanswerthequestionsthatfollow:
What is spirituality? It is nothing but living life sensibly, striking a balance with your material life,
neglectingneither.Wehavearound us theimmediatereality,theworld.Livingsensibly,andperfectly
inthisworldis importantandisourimmediategoal.Wehavetoconsider bothmaterial andspiritual
parts.Wehavetoburnkarmasbymeditationandgainfreedomfromalltypesofbondages.Wehaveto
gainfreedomatseverallevelsbeforeachievingthefinalfreedom,Moksha,theultimategoal.Wehave
to emote and think without any past influences; this ispossible by meditation. Meditationis a must
eventoliveourmateriallifesensibly.Butmeremeditationwon’tmakeusspiritual.Wehavetoallow
the influence of meditation into our daily life.
Sofromnow,let usstepcomplaining,grumblingand feelingdisgustedwith the systemswehave.Let
us begin channeling Light to these systems and the people, instead. Of course, we complain about
others.Sometimes by mistake,wealsogrumble about andcondemn ourselves.
Weknow,whenwechannellight,wecanbringchangesandcompletelypreventdestructionorminimize
it, at least. Let us change ourselves. Then the systems change automatically. If you change, people
aroundyoualsochange.SochannellightdailyforatleastsevenminutesHealyourselfandtheworld.
(Source: The Speaking Tree)
Q.1.Giveasuitabletitletothepassage.
Q.2.Expressthemainideaofthepassageintwotothreesentences.
Q2 Readthepassagecarefullyandanswerthequestionsthatfollow:
Three years ago, technophobic Sushmi Ghosh refused to exchange her feature phone for a smart
phone.Butlastmonth,the45yearsoldhighschoolteacherorderedafrontloadingwashingmachine
through an eretailer’s app on her iPhone. “I was pleasantly surprised,” she said, “It was not only
delivered in a daybut also installed immediately. Ididn’t have towalk to a shop in this heat. Isaved
somemoney too because Ibought it during asale.”Onlinesalesof large applianceshave boomed in
thepasttwoyearsaseretailershaveaddressedbuyers’deliveryandinstallationconcerns.Whilethey
also offered discounts earlier, delivery took days and installation was another waiting game, with
further uncertainty about warranty.
Duringitsrecentlyconcludedsale,Amazonclaimedinthefirstdayitsoldaroundhalf(20,000units)of
theaveragedailyTVsalesinIndia.“Therehasbeenahugeshiftinthenumberofbrandsthatwantto
dobusinesswith us,” said Manish Tiwary, VP (category management), Amazon India
Some manufacturers have even teamed up with eretailers to offer TVs, refrigerators and washing
machines with specific features. “This helps bring down prices,” said Sandeep Karwa, head of large
appliances at Flipkart. From being a negligible part of its business, the large appliances category has
becomeoneofthetopthreeearnersforFlipkart.ItacquiredJeeves,arepairservicesandmaintenance
company, for providing aftersales services. At present, Flipkart offers oneday delivery on 72% of
largeappliancesthrough10dedicatedwarehouse.“Weareworkingonapilotthatwillenableinstallation
of 70% of our large appliances at the time of delivery,” said Karwa. Exchange offers and financing
optionsprovidedbyeretailershavealsopushedsales.“Duringourlastsale35%ofshoppersoptedfor
nointerest EMIs,” said Karwa.

Chapter-4 : Comprehension Passages - 259 -

 Amazon has also created a home services arm to synchronise delivery and installation of products.
Amazon’sTiwarysaid,“Wecreatedourgroupoftechnicianswhowillgettheinstallationdoneaccording
totheconvenienceofthecustomer.Insmallertowns,thisisabighelpsincemanybrandsdon’thavea
robust presence.” Amazon has nine warehouses from which it can reach 80% of the country. Most
manufacturers, however, are tightlipped about online sales as eretailers’ discounts and freebies eat
into the margins of their brickandmortar dealers. While a spokesperson for LG turned down an
interview requestforthisstory,SamsungIndiadidnotreplytoan email.
AjaySeth,directorofsalesandserviceatPanasonicIndia,said,“It’sstillearlydaysforonline.Customers
wanttohave alook and feelof theproductbeforebuying.Most of ouronlinesalesconsist of small
appliances.” Companies such as BPL, Vu and TCL, which follow an online first model, are optimistic,
thoughoffavourableresponsefrombuyers..DevitaSaraf,founderofTechnologies,whichsells40%of
allTVssoldonFlipkart,said,“WhenIstartedsellingVutelevisionswedidabusinessofRs.35crorein
201314.Aftergoingonline,weended201617atRs500crore.”
1. SushmaGhoshsays,“Iwaspleasantlysurprised.”Shewassurprised
a) Bythepromptnessoftheserviceforthewashingmachine.
b) Becauseshe managedto save moneywhilebuyingthe washingmachine.
c) Bythewarrantyofferedforthewashingmachine.
d) Bythequick deliveryandinstant installationof thewashing machine.
2. Somemanufacturershaveeventeamedupwitheretailersto
a) Give special discounts
b) Have special sale offerson largeappliances like T.V.s with specific features
c) Getdiscountsfromeretailers
d) Togivediscountstoeretailers
3. OneofthetopthreeearnersofFlipkartis
a) Household goods
b) Clothes brands
c) Large appliances
d) Mobile phones
4. Thetwofactorsthatarepromotingsalesoferetailersare
a) Exchange offers and easyfinancingoptions available.
b) Quick deliveryand goodproducts.
c) Easeofserviceandnodisturbanceofanykind.
d) Manyoptionstochoosefromandabilitytoviewproductsfromhome.
5. Brickandmortarstoresareaffectedbyeretailers
a) Promoting their sales
b) Innomajorway
c) Bystartingapricewar
d) Byeatingintotheirprofits

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Q3 Readthepassagecarefullyandanswerthequestionsthatfollow:
The Internet has changed our world. It has been defined as ‘a worldwide broadcasting capability, a
mechanism for information dissemination, and a medium for collaboration and interaction between
individuals and their computers without regard for geographic location’. Instant communication on
varioussocialnetworkingsitesisanoffshootoffthe internetrevolution.
Though these siteshave numerous advantagesin termsof connectivity and sharinginformation, and
are increasingly becoming a part of everyday life of people; they are being misused by antisocial
elements, terrorist organizations, governments, various institutions and the public at large. Twitter,
instagram,snapchat,blogs,whatsapp,virtualworlds,andspecificsocialnetworkingsiteslikeFacebook
areaninseparablepartofourlivesinthemodernworld.
Oneofthebiggestdisadvantagesislossofprivacybyindividuals.Socialnetworkingsitesaskforagreat
dealofpersonalinformation,anditispossibleforpeopleinallpartsoftheworldtoseethatinformation.
Thereareprivacysettingsforthesesites,butmanypeopleareeitherunawareofthem,orarecareless
about guarding their personal information. Besides, the information creates a “digital footprint” that
cannotbeeasily erased.Manyshare inappropriatecontent andpicturesonwhichcanbemisused by
unscrupulous elements and cause irreparable damage to reputations.
Therehavebeeninnumerableexamplesofsexualexploitationofyoungboysandgirlsonsocialmedia.
Inappropriate photographs, messages, and private content that they shared on the site, is used to
blackmail them. Numerous instances of pictures being morphed, and used to ruin reputations, have
been reported. Sexual predators make fake profiles, befriend young people and take advantage of
them. Celebrities and ordinary citizens are trolledmaliciously on twitterif theiropinions aredisliked
byacertainsectionoftheirfollowers.Explicitsexualthreatsarepostedontheiraccounts.
Cyberbullyinghasbecomeacommonphenomenononsocialnetworks.Allmostallteenagersadmitto
beinga targetofsuchbullying at least once in theirlives.Peopleareabused,reviledandmercilessly
teased.Beingmalicious,unkindandcruelisfun forsomepeople.Othersusethe mediumtosend an
intimidatingmessage,startanastyrumor,oruploadembarrassingphotos.It’spossibletobecompletely
anonymousaswell,sothereislesschanceofgettingcaught.Suchbullyingcauseslastingpsychological
damagetothevictims.Manyhavebeenknowntohavetakentheextremestepofcommittingsuicide.
Another problem that has been highlighted by psychiatrists is ‘internet addiction disorder’. Many
people literally live out their lives on social media. Every event and happening has to be shared on
Facebook. Their lives revolve around the number of likes and comments they get on their posts.
Unfortunately, many of these comments are insincere and fake, thus giving the individual incorrect
perception of himself / herself. Moreover, this addiction consumes a lot of time which would be
otherwise productively usedforthe benefit of thebodyand mind.
Contrarily,interactingoninternetisalsoknowntohavecausedalossofsocialskills.Manypeoplefeel
comfortablechattingwithapersononlinethaninengaginginafacetofaceverbalconversation.More
importantly,youcandoallkindsofthingsyoucouldneverdoinreallife,likegivinghugsandkissesto
everyone, which you would rarely do in real life. And you can give yourself a completely unique
identity.Sometimespeoplestarttoprefertheirfakeonlinelivestotheiractuallives,andthisiswhen
socialnetworkingsites starttonegativelya ectsocialskills.
Anotherissuegaininggroundisspreadingoffakenewsontheinternet.Enormousamountofinformation
onsocial,political,economic,healthrelatedinformationisavailableonvarioussites.Thereareserious
social ramifications of circulation of such false information. The government is making attempts to
bring inlawstocontrolthisphenomenon.

Chapter-4 : Comprehension Passages - 261 -

 Inconclusion,theadviceisthat,likeeverythingelse,usesocialmediainmoderationandwithwisdom
1. Weloseprivacyonsocialnetworkingsitesbecause
a) Weputmanyphotographsonthesite.
b) Sitesrequireustoshareagreatdealofourpersonalinformation.
c) We choose wrongfriends.
d) Youngsters are generally careless.
2. Cyberbullyingiscommonbecause
a) There are many bullies everywhere.
b) People are mean and unkind.
c) It’svery easyto“hack”intoanotherperson’sprofile.
d) Itisquickandeasytopostnastycommentsanonymouslyonsocialmediasites.
3. Whatisthenegativeinfluenceof‘socialnetworking’inthecontextofthepassage
a) It takesawayour identity.
b) Wedonotmakemanyfriends.
c) We network with friends and colleagues easily and frequently.
d) Itcanleadtolossofsocialskills.
4. Whichofthefollowingisnotabyproductofsocialnetworking(inthepassage)?
a) Sexual predatory
b) Damaging of social skills
c) Ability to makemany friends
d) Wasteofgreatdealoftime
5. Whichofthefollowingwordsismostsimilarto‘intimidating’asusedinthepassage
a) To get intimate with someone
b) To frighten or threaten someone
c) To become personal
d) Tobe toofriendly

Q4 Readthepassagecarefullyandanswerthequestionsthatfollow:
AutomationandArtificialIntelligence
Automationandartificialintelligencearethebuzzwordswhichhavecreatedexcitementandcommotion
in the industry and economy. AI is the simulation of human intelligence processes by machines,
especially computer systems. These processes include learning (the machines acquire knowledge of
rules for using the information), reasoning (using the rules to reach approximate or definite
conclusions), and selfcorrection.
Scientificandtechnologicaladvancementshaveleadtotheinventionofsophisticatedmachines,robots
and software which surpass humans in physical and cognitive functions. This means that there is
increased profitability which leads to economic growth. However, the downside is loss of traditional
jobsandincreasingunemploymentinvaried sectorsof theindustrywhichhasa rippleeffecton,and
serious implications for the society.

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 As governments, organizationsand workforceall over the world grapple with thisphenomenon,one
recalls the words of the U.S. president, Lyndon B. Johnson in 1964. He had said at that time, “If we
understand it, if we plan forit, if we apply it well, automation will not bea job destroyer or have a
family displaced. Instead, it can remove dullness from the work of man and provide him with more
than man has ever had before.” It also brings to fore the words of Isaac Asimov, who had said that,
‘there is no way but onwards’, in relation to scientific inventions impacting human lives.
The McKinsey Global Institute has published a report on automation and its potential effects on
productivity. According to them, activities that involve data collection, data processing, and physical
workinfactoriesinsectorssuchasmanufacturing,foodservices,transportationandwarehousing,and
retail willbe the most affected.
Ononehand,AIandautomationwillopennewavenuesforindividuals,certainsectionsoftheindustry
andtheeconomy,butontheotherhand,theywillalsoleadtolossofjobsofmillionsacrosstheworld,
creatinganunhappy,dissatisfiedanddisgruntledpopulation.Itwillalsomeanmoremoneyallocation
bythestateforsocialwelfare.Thus,theneedofthehouristohavestrategiesandpoliciesthatcould
increase the benefits of and diminish its negative impact.
Oscar Salazar, who built the app for astartup ideathat we now callUber, says he thought very little
about how the application would impact society, and the large number of drivers who would lose a
source of income. “We are all responsible,” he said at the Milken Global Conference in Los Angeles.
“Weareaddingtechnologytoasocietywithoutthinkingabouttheconsequences.Ithinkgovernment,
industryandsocietyneedtoworkmoretogether,becauseitisgoingtogetcrazierandcrazier.”According
tohim,thetechnologycompanieswhocreateAlI,mostnotonlyparticipateinthediscussionsonthee
effects of theautomation, but alsotake responsibility for them.
Itis certain that AIdrivenautomation will influenceand change theeconomy over thecoming years
anddecades. The challengeforallstakeholdersandpolicymakerswillbetoupdate,strengthen,and
adaptpoliciestorespondtotheeconomiceffectsofAI.Thesolution,itseems,liesinidentifyingskills
required in the job market in the future; reskilling and retooling workers for the new job scenario;
revampingeducationforjobsofthefuture;andalsosupportanddevelopAIforitsmanybenefits.
Though no one can be certain how much and howfar the human race will benefit from AI, or what
drawbacksanddisruptionspeopleacrosstheglobewillfacebecauseofit,theneedtobepreparedfor
its impact on an individual, community, national and international level is vital and necessary in the
future.
1. What is ‘artificial intelligence’?
a) Intelligence feigned by some humans.
b) Intelligence exhibited by machines and software.
c) Intelligence which is based on falsehood.
d) Inappropriate intelligence.
2. OscarSalazer says, ‘Weareallresponsible’.Forwhatdoeshe hold usresponsible?
a) Forcreatingnew jobsin theindustry.
b) For developing new software for industry.
c) Forcreatingtechnologyleadingtolossofjobs.
d) Forcreatingnewstartups.
3. Thewayforwardforthetechcommunityis
a) To develop more software.

Chapter-4 : Comprehension Passages - 263 -

 b) To create an environment in which employees feel comfortable.
c) To participate in discussions.
d) Totraintheexistingworkforcefor techjobsofthefuture.
4. Whichistheclosestmeaningofa‘startup’inthecontext?
a) Tostart somethingnew.
b) An insolent person.
c) Ayoungcompanythatisjustbeginningtodevelop.
d) Fresh and modern.
5. IsaacAsimovsays,‘Thereisnowaybutonwards.’Hemeansthat
a) Wehavetomoveforwardquickly.
b) Scienceandtechnologyarebringingrapidchangesin our lives.
c) Further development in science and technology will find solutions to problems created by new
inventions.
d) Movingonwithlifeistheonlyoptionavailabletousinthecurrentscenario.
Q5. Readthepassagecarefullyandanswerthequestionsthatfollow:
‘The difference between technology and slavery is the slaves are fully aware that they are not free’
NassimNicholasTaleb
Howistechnology impacting our lives? Many research studies are seeking answers to this question
and comingupwithdataandinformationthatisworrisome.Asthehumanraceincreasinglydepends
on devices for work and leisure, technologyinvadesevery aspect of our lives. We have appliances in
ourkitchensandhomes,machinesandcomputersinoffices,andofcourse,andinnumerablegadgets
without which people feel lost and incomplete.
In fact, we now try to measure every aspect of our lives with gadgets and gizmos available in the
market.Thesehealthdevicescantrackroutineactivitieslikesleep,exercise,diet,heartbeat,breathing
rate,stepstaken,waterintakeandeveryconceivableaspectoflife.Healthandfitnessismeasuredby
a smart watch,fitnessband and otherwearable apps availablein the market.Though many ofthese
apps are truly useful to measure health parameters like blood pressure, heart rate, etcetera for the
ailing; they have begun to dominate the lives of people for whom it becomes their personal health
informationguru.Ifthehealthparametersdonotmatchthedesiredoutcomeoftheapplicationthey
areusing,itcausesanxietyandstress.Manyhealthfreaksendupwithobsessivecompulsivedisorders.
Severalpsychiatristsdisapproveofourdependenceongadgetstoassessourhealth.Theyrefertoitas
the over monitoring syndrome. Instead of listening to our own bodies, which are best judges of our
physicalandmentalhealth,welookatthenumbersonthegadget totellus whetherwehadagood
workout or sufficient and restful sleep at night. Since every human being is different, can an app
accurately match and measure the parameters of each individual using it? Another downside is that
insteadofenjoyingthesimplehealthbenefitsandpleasureofasport/workout,thecompletionofthe
targetbecomesthefocalpoint oftheexercise.
Theadvicegivenbymedicalpractitionersisthat ahealthylifeisjudged byyourphysical,mentaland
socialwellbeingandnotmachinesofanykind.Sousegadgetsjudiciouslyanddonotletthemdictate
your life
1. Healthdevices are useful for
a) checking our moods.

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 b) keepingfit andhappy.
c) keeping a track of everyday activities like exercise, sleep etc.
d) monitoring work and leisure activities.
2. Medicalpractitioners’adviceisthatwe shouldmeasure health by
a) physical  fitness
b) mental  fitness
c) social well being
d) allof the above.
3. Thedrawbacks ofhealthdevicesare
a) theyaretoo bulky.
b) theyare verycostly.
c) theycausepressureand anxietyin users.
d) theyareacauseoftoomuchdistraction.
4. Weshouldassessourhealthby
a) usinghealth gadgetswhich measureallourparameters.
b) talkingtoadoctor.
c) listeningto our ownbody.
d) askingfamily and health experts.
5. Findwordsinthepassagewhicharesimilarinmeaningtotheonesgivenbelow
a) Dimensions
b) Supervising or overseeing
Q6 Readthepassagecarefullyandanswerthequestionsthatfollow:
StudiesbytheBengalurubasedSwamiVivekanandaYogaAnusandhanaSamsthana(SVYASA)analysed
thechangesthattakeplaceinthebodyduringOmmeditation.Thestudyfound“smallbutstatistically
significant” reduction inhearrate during Om meditation.This, according tothe researchers,suggests
a deep psycho physiological relaxation, which in turn increases alertness. The study also showed
decrease in blood flowinthe skin,which,too, isindicative of improved alertness.
Some studies based on the analysis of electroencephalo graphic (EEG) recordings have shown that
mindfulness meditation improves relaxation. One study that looked at performance in cancellation
tasks (a psychometric test of visual perception and vigilance) in 70 healthy subjectssome of them
meditated before the taskfound that performance in such tasks improves after meditation.

Researchers have demonstrated that meditation leads to positive changes in midbrainassociated
with vision, hearing, motor control sleep and alertnesswhether one choose to meditate on a single
syllable or a series of thoughts, Transcendental meditation, which uses a sound ormantra, improves
perception of hearing. In the various studies done bySVYASA on sleep and meditation, it is said
meditationinmanywaysissimilartoadeepstateofsleep.Bodilysensationisvoluntarilyreducedin
both these conditions. However, unlike in sleep, the level of awareness is significantly higher in
meditation.

Chapter-4 : Comprehension Passages - 265 -

 1. Meditationbene ts the
a) Body b) Mind c) Spirit d) Allofthe above
2. Transcendental Meditation uses
a) Sleep mode b)Soundormantra c) Music
d) Psycophysiological phenomena
3. Selectthemostsuitable titleforthepassage
a) Mindful Meditation
b) Body of Meditation
c) TheScience of Meditation
d) Best of Meditation
4. Selecttheoptionwhichisclosestinmeaningto‘vigilance’inthecontext
a) Keeping track of
b) Helpfulness
c) Perception
d) Attentiveness
Q7 Readthepassagecarefullyandanswerthequestionsthatfollow:CerebralMatter
Thehumanbrainhasbeenexaminedforagesinanattempttounderstanditsstructureandfunctioning.
Scientists,over time, have indicated that theslow decline of brain as you age is inevitable. It is true
that after the age of fortythe brain begins to losevolume.However, it has recently been discovered
that if we continue to keep it active by using it to learn multifarious new and challenging skills and
activities,itwillimproveinsteadofdeclining.Researchshowsthatwecannotonlychangethewaywe
thinkandfeel,butthatthosethoughtsandfeelingscanchangetheveryphysicalworkingsofthebrain
itiscalledneuroplasticity.Andthatmeansthebrainyouownistheoneyoubuild,andyouarebuilding
iteverydaywithwhatyoudo.
Exercise andnutritionare key,andgeneticsplaysarole,ofcourse.
A US study recently published findings on online brain training games, concluding that the games
whichchallengememoryandreasoningskillscouldcuttheriskofdementiabyathird.Expertsdescribed
these results as “spectacular”.
Butthere areotherchanges you can makethathaveaproven impactonbrain function. Youneedto
challengesyoubrainsofindsomethingreallydifficultandnewthatyouliketodoanddoit.Numerous
studiesprovethatthemorementallyactiveyoustay,thelongeryoustaymentallyactive,buildingnew
networksamongyourbraincells.Buildaboat,learnalanguage,makeart,makemusicanddon’tretire
from life when you stop working. Studies show that the educated brain stays sharp longer, so keep
learningor even better, teach a class.
The healing benefits of sleep are obvious. Now studies show that it enhances memory if you sleep
withinafewhoursoflearningsomethingnewandthatsleepdeprivationdisruptsmemoryformation.
Thesestudies,bothfromtheUS,foundthatevenaveryshortsleepafterlearningstrengthensmemory.
Itappearsthatourunconscious(orautonomic)nervoussystemstaysatworkwhilewesleep,seemingly
consolidating all that new learning.
Anddon’tforgetnaps.Evenveryshortonescanenhancememoryandimprovelearning.SaraMednick,
aprofessorofpsychologyattheUniversityofCalifornia,Riverside,authorofTakeaNap!ChangeYour
Life and coauthor of oneof the sleepstudies, hassaid that napping between 15 and 90minutes of

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 greatforthebrainandcanbeasgoodasawholenight’ssleep.
Dozensofstudiesshowmeditationreducesstress.Andnewerstudiesshowmeditationalsophysically
changesthebrain.OngoingstudiesfromRichieDavidsonattheCenterforHealthyMindsattheUniversity
ofWisconsinMadison,USA,haveshownmeditationincreasegreymatterinpartsofthebrainassociated
with flexibility, memory and learning, and also executive functionthe ability to solve problems and
make choices. While the most dramatic changes were seen in brains that had been meditating for
decades,measurablebrainchangeswereseenafteronlyafewmonths.
(Source:TheWeek)
1. Neuroplasticity refers to
a) Abilityofbraintoformandreorganizeconnectionstoremainactiveandyoung
b) Flexibility ofthe brain
c) Challenging and stretching the brain
d) Change thoughts and feelings
2. Thebrain remainsactiveandagileif
a) Eat nutritious food
b) Meditate
c) Build newnetworksinthebrainbylearningnew things
d) Allofthe above
3. Thebestwaytopreventdementiais
a) Exercise everyday.
b) Control your thoughts and feelings.
c) Meet many people frequently.
d) Enhance memory, reasoning skills and continue learning all your life.
4. Sleeping is
a) Detrimental for physical and mental health.
b) Makes you lethargic.
c) Beneficial for all brain functions.
d) Disrupts memory formation.

Q8 Readthepassagecarefullyandanswerthequestionsthatfollow:
‘Chanakya Neeti’ is synonymous with efficient statecraft around the world, and Chanakya is India’s
face of political statecraft and the rich political understanding of its ancient heritage. No political
efficiencyisdevoidofunderstandingChanakyaandhiswaysofstatecraft.Infact,heshowedtheworld
whatpoliticaltheoryisinpractice.AncientIndianhistoryisincompletewithoutareferencetohisways
ofstatecraft andpolitics.
Chanakyaamazesanyscholarwithhismultifacetedcharacter,butithadadistinctfocusedaim.Hewas
more about philosophy and thoughts put into action. He does not bore you with his philosophical
theorybutengagesyoutothink,actandachievewhatyoudreamof.Heoverthrewamightyempireand
put in the throne a humble man like ChandraguptaMaurya. He identified the potential ruler from a
group of children, thus gave the world a great sovereign who united the Indian subcontinent into a
political and administrative unit.
For sure, Chanakya’s mental capabilities were superb. The modern global diplomacyrevolves around
his principal of ‘saam, daam, dand, bhed’ (persuade, purchase/ set a price upon, punish, exploit the

Chapter-4 : Comprehension Passages - 267 -

 weakness). His ‘Arthashastra’ elevates the state to a position where service to it entails imperatives
unknown to morality.
Chanakya would beidentified as a professorof political science and economics at Taxila. He was an
economic,politicalandroyaladviserandathinktank,andcanbecreditedtohavegivenIndiaitsfirst
complex united empire.
1. ‘Chanakya Neeti’ is
a) An individual
b) A political treatise
c) A philosophy
d) Acomplexwayofthinking
2. Chanakyaamazesscholars becauseof
a) Hischaracter
b) Hisfocused aim
c) Boring political philosophy
d) Abilitytogetpeopletothink,actandachievetheirdreams.
3. In ‘Arthashastra’ Chanakya places the interests ofthe state
a) Below moral responsibility
b) At par with moral responsibility
c) Above any moral responsibility
d) Thestatehasnothingtodowithmoralresponsibility
4. Themodern dayglobaldiplomacyfollowstheprinciple of
a) Reward, request, entreaty and punishment
b) Request, cajole, threaten and persuade
c) Purchase, punish, request and accept
d) Persuasion, exploitation, punishment and purchase
5. Pickoutwordsfromthepassagewhichmeans
a) involves
b) Raises
Q9 Readthepassagecarefullyandanswerthequestionsthatfollow:
‘Kindness & politeness are not overrated at all, they are underused’  Tommy Lee Jones
Following the latest trends and being fashionable is the ‘in thing’ these days. This fad is not only
prevalent in clothes, accessories, home decor and every conceivable thing, but also attitude and
behavior. These days’ being rude, loud, intolerant and aggressive is ‘COOL’. Anyone who is quiet,
polite, and keepsa low pro le islabeled asissy,simple and regressive.
Increasingly,theworldisbecoming‘I’centric.Everyonebelievesandfollowstheprincipleof‘ME’and
‘MYSELF’above‘YOU’and‘YOURS’Checkingyourphonerepeatedlywhenincompany,notlisteningto
others,interruptingaconversation,talkingloudlyonthephoneinpublicplaces,parkingmycarinthe
middleoftheroadandbeingunmindfulofthetrafficchaos,beingnastyonsocialmedia,aggressionon
theroadisallapartofnormalbehaviorthesedays.
A2013surveybyVitalSmartsfoundthatassocialmediausagesurgedovertheyears,ithasgivenrise
to increasing cases of incivility; with 78 per cent of 2,698 people reporting and increase in rudeness
online.Socialmediahasbroughtaboutanincreaseinbadmannersandlossofcourtesies,decencyand

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 etiquetteinsociety.Perhaps,itiseasiertobemean,nastyandrudewhenyouarenotinafacetoface
interaction with somebody.
Reality shows on T.V. like ‘Big Boss and ‘Roadies’ encourage bad manners and vulgarity. People get
vicariouspleasureinwatchingthecontestantsslingmudoneachotherandflingsleazyaccusationson
others.Themore conniving, cunningandcrudeyou are,thehigheryourchancesofwinning.It isare
ectionon oursocietythatthriveson suchshows.Sadly,appalling behaviorandintolerantviews,with
agooddoseofabuse,aggressionandexpletivesthrownin,havebecome fodderforthesoul.
1. We are becoming increasingly rude because
a) of modern day stresses.
b) we like being rude.
c) social media encourages such behavior.
d) we aren’t concerned about others feelings.
2. Inmanyrealityshowslike‘BigBoss’and‘Roadies’thewinneris
a) polite and courteous
b) friendly and considerate
c) happy and carefree
d) nasty and discourteous
3. Thesedaysitis‘fashionable’and‘cool’tobe
a) dressed in the latest fashion
b) knowledgeable and accessible
c) funny and friendly
d) ill mannered and insolent
4. Pickoutwordsfromthepassagewhichmeanthefollowing
a) scheming
b) imagined

Q10 Readthepassagecarefullyandanswerthequestionsthatfollow:
RBIGETSPOWERTOACTAGAINSTDEFAULTERS
Thegovernment haspromulgated anordinance empoweringtheReserve Bankof India(RBI)toissue
specific instructions to banks to act against defaulters and also initiate bankruptcy and insolvency
proceedingsunderthelaw,while promising morestepsto ensure thatbanks get crackingontackling
baddebtamountingtooverRs6lakhcrore.
Whiledetailsofadditionalstepswillbeannouncedshortly,financeministerArunJaitleytoldreporters
thatnewtargets,beingfixedforthestaterunlendersaspartoftheannualexercise,willlinkadditional
equitysupporttoimmediate “cashreleaseinitiatives”,suchassaleofassets,closureofnonprotable
branches,stepstoturnaroundthebusinessandstrengtheningofcreditappraisalprocess.
While some of the steps such as sale of noncore assets have been discussed in the past too, banks
failed to make much headway. Forthe moment, the government has focused on thelegal provisions
throughtheordinancetolettheRBItoissue“directionstoanybankingcompanyorbankingcompanies
toinitiateinsolvencyresolutionprocessinrespectofadefaultundertheprovisionsoftheInsolvency
andBankruptcyCode(IBC),2016”.
TheordinancealsoempoweredtheRBItosetupsectoroversightpanelsthatwillhelpshieldbankers
from possible action by investigative agencieslooking into loan restructuring proposals. The fear of
agencies such as the CBI, the Comptroller & Auditor General and the Central Vigilance Commission
havebeencitedbybankerstoholdbackdecisions.
Chapter-4 : Comprehension Passages - 269 -
 “ACommitteewhichoverseessuchJLF(JointLendersForum)arrangementsisonestepwhichwillgive
them (bankers) this comfort level,” finance minister Arun Jaitley said at a press conference. An
amendment is also proposed to the Prevention of Corruption Act, for which a Bill was introduced in
parliament.ThestandingcommitteehassubmitteditsreportonitandarevisedBillwillbeintroduced
in parliament soon.
Jaitley–whomadenobonesabout“unacceptablyhighlevelofnonperformingassets(NPAs)”hindering
the capacity of lenders to fund economic activities said the government has also given a onetime
general authorisation to the RBI. The ordinance, recommended by parliament on Wednesday, was
promulgated by President Pranab Mukherjee onThursday evening.The ordinance, which insertstwo
newprovisionsintotheBankingRegulationAct1949,willhavetobeplacedinparliamentforapproval
in the monsoon session.
“Theobjectofthisact isthatthepresentstatusquocannotcontinue.And,thepresent statusquois
that not much was moving and therefore paralysis in the name of autonomy is detrimental to the
economyitselfandthereforereallyrequirestobebroken,”Jaitleysaid.Hesaidthemovewillexpedite
commercial decisions of banks. The minister said one of the objects is that “when bankers take
commercial decisions on commercial and banking considerations, they must have adequate comfort
level”.
(source: The Times of India)
1. TheReserveBank has beenempowered to
a) act against loandefaulters.
b) begin bankruptcy and insolvency proceedings against many people.
c) tacklebaddebtbywithdrawing moneyfromaccountsofdefaulters.
d) give warning to loan defaulters.
2. Bankersdonottakeactionagainstdefaultersbecausethey
a) havenopowerstodoso.
b) fear action by investigative agencies.
c) areforbiddentodosobyforcesinpower.
d) havenodesiretodoso.

3. AccordingtoMr.Jaitley,thepresentstatusquocannotcontinueas
a) itis detrimentalfor the economy.
b) nothing is moving forward.
c) borrowersaretakingthebanksforgranted.
d) thebankshavetodosomething.
4. Whichisthemostappropriatemeaningof‘statusquo’
a) highstatus insociety
b) thestatusquotient insociety
c) existing circumstances
d) poor circumstance

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 HOMEWORK1

Q1 Tailgatinganothervehicleisunsafeandillegal.Manyrearendcollisionsarecausedbydriversfollowing
too close to the vehicle in front of them. The rules state that a driver must keep sufficient distance
fromthevehicleinfrontinordertostopsafelyandavoidacollision.Driversshouldallowaminimum
twoseconds’gapbetweentheirvehicleandtheoneahead.Atsixtykilometresanhour,thisequatesto
thirtythree metres; at a hundred it equates to fiftyfive metres. More distance is needed to safely
stopinrain orpoorvisibility.
1. Tailgating another vehicle is unsafe because:
A:allrearendcollisionsarecausedbydriversfollowingtooclosetothevehicleinfront.
B:itmaynotallowsufficienttimeandspacetostopandavoidacollision.
C:itisagainsttheroadrules.
D:itisarecklesspractice.
E:Noneofthese.
2. ‘Moredistanceisneededtosafelystopinrainorpoorvisibility.’Wecaninferfromthisthat:
A: people drive faster in rain and poor visibility.
B:thewriterismerelycalculatingonthesafeside.
C:brakingismorehazardousinrainandpoorvisibility.
D:theroadrulesstatethatthismustbeso.
E:Allofthese.
Q2 ThereisaplacefortykilometresnortheastofPortland,Victoria,whichmakesforanunusualvisit.Itis
Lake Condah. Here are to be found remains of aboriginal settlements: the circular stone bases of
several hundred huts, rocklined water channels, and stone tools chipped from rock not normally
found inthearea.Oneoftheattractionsof LakeCondahlongagowas itsfishandthemoststartling
evidenceofaboriginaltechnologyandengineeringtobefoundtherearethesystemsbuilttotrapfish.
Water courses had been constructed by redirecting streams, building stone sides and even scraping
out new channels. At strategic spots, they piled rocks across the water courses to create weirs and
build funnels to channeleels and fish into conical baskets. Thisis an eelfishing technique which has
hardlychangedtothepresentday.Besidesomeofthelargertraps,therearetheoutlinesofrectangular,
stonelined ponds, probably to hold fish and keep them fresh.
Onthebluffsoverlookingthelake,stonecirclesareallthatremainofancientdwellings.Notallofthe
stones werequarried locally.The huts vary insize, butallhave gaps fordoorways located on thelee
side, away from the prevailing wind. One theory is that the stone walls were only waist to shoulder
high,withthetoproofedbybranchesandpossiblypackedwithmud.
The site presents a picture of a semisettled people quite different from the stereotypeof nomadic
huntergatherers of the desert.
1. Theword ‘stereotype’,asused intheabove passage, means:
A: distant culture.
B: opposite picture.
C: electronic print version.
D:standard view.
E:Noneofthese.

Chapter-4 : Comprehension Passages - 271 -

 2. LakeCondahisseenasunusual,mainlybecause:
A:itissoclosetoamaintown.
B:thereareremainsofbuildingsstilltobeseen.
C:itrevealsasocietythatwasatleastpartlysettledandhadbuildingandengineeringskills.
D:thereisevidencethatsomeofthebuildingstonewasimported.
E:itshowsthelakedwellersweretotallyreliantonfishforafoodsource.
3. Thesentencebelowdoesnothaveanypunctuation.Choosetheoptionwiththecorrectpunctuation.
oneofthesedayssaidmaryyoullgetintotrouble
A:Oneofthesedays,saidMary,you’llgetintotrouble.
B:“Oneofthesedays,”saidMary“you’llgetintotrouble”
C:“Oneofthesedays,”saidMary.“You’llgetintotrouble.”
D:“Oneofthesedays,”saidMary,“you’llgetintotrouble.”
E:“Oneofthesedays,”saidMary,“youllgetintotrouble.”
4. Whatdoesthissentence suggest?
Abirdinthehandisworthtwointhebush.
A:Yourownpossessionsarealwaysworthmoretoyou.
B:Birdsarehardtocatch,sohangontooneifyoucatchit.
C:Tohavesomethingisbetterthanhavingnothingatall.
D:Atrainedbirdistwicethevalueofanuntrainedone.
E:Thereisnopointinbeingenvious.
Q3 Between us there was, as I have already said somewhere, the bond of the sea. Besides holding our
hearts together through long periods of separation, it had the effect of making us tolerant of each
other'syarnsandevenconvictions.TheLawyerthebestofoldfellowshad,becauseofhismanyyears
andmanyvirtues,theonlycushionondeck,andwaslyingontheonlyrug.TheAccountanthadbrought
outalreadyaboxofdominoes,andwastoyingarchitecturallywiththebones.Marlowsatcrosslegged
rightaft,leaningagainstthemizzenmast.Hehadsunkencheeks,ayellowcomplexion,astraightback,
an asceticaspect, and, with his arms dropped,thepalmsof handsoutwards, resembledan idol.The
Director,satisfiedtheanchorhadgoodhold,madehiswayaftandsatdownamongstus.Weexchanged
a few words lazily.
Afterwardstherewassilenceonboardtheyacht.Forsomereasonorotherwedidnotbeginthatgame
ofdominoes.Wefeltmeditative,andfitfornothingbutplacidstaring.Thedaywasendinginaserenity
of still and exquisite brilliance. The water shone pacifically; the sky, without a speck, was a benign
immensityofunstainedlight;theverymistontheEssexmarsheswaslikeagauzyandradiantfabric,
hungfromthewoodedrisesinland,anddrapingthelowshoresindiaphanousfolds.Onlythegloomto
thewest,broodingovertheupperreaches,becamemoresombreeveryminute,asifangeredbythe
approachofthesun.
Andatlast,initscurvedandimperceptiblefall,thesunsanklow,andfromglowingwhitechangedto
adullredwithoutraysandwithoutheat,asifabouttogooutsuddenly,strickentodeathbythetouch
ofthatgloombroodingoveracrowdofmen.
From‘TheHeartofDarkness’,byJosephConrad.
1. Thenarratorofthispassageistellinghisstoryfrom:
A:awharf.
B:thedeckofayacht.
C:ahighvantagepoint.

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 D:theedgeoftheEssexmarshes.
E:Noneoftheabove.
2. Themoodofthemeninthispassageisbestdescribedas:
A:surlyB:resignedC:contemplativeD:restlessE:ecstatic
3. Fromthepassage,itisclearthatthemen:
A:donotgetalong.
B:show aquiet understanding.
C:cannotbebotheredwithoneanother.
D:havejusthadaquarrel.
E:arewornout.
4. Theword ‘diaphanous’,usedtodescribethe mist,means:
A:almosttransparentB:fragileC:suffocatingD:silentE:noneoftheabove
Q4 Amongpredatorydinosaurs,fewflesheaterswerebigger,fasterandnastierthanthe"tyrantlizard"of
popular imagination,theTyrannosaurus Rex.Atleast,thatis what wehave been ledto believe.
Nowresearchsuggeststhat,farfrombeingtheFerrariofdinosaurs,TyrannosaurusRex,whoseferocious
reputation has fascinated generations of schoolchildren, was in fact a cumbersome creature with a
usual running speed of twentyfive kilometres an hour. This is a mere snail's pace compared with
modernanimalssuchasthecheetah.
Unlike some of the predators of today's African savannah, which can change direction almost
immediately,thedinosaurwouldhavehadtoturnslowlyorrisktumblingover.Andwhileahumancan
spinfortyfivedegreesinatwentiethofasecond,aTyrannosauruswouldhavetakenasmuchastwo
seconds, as it would have been hampered by its long tail. Thankfully, however, all its prey, such as
triceratops,would have been afflictedwiththe samelack of speed andagility.
Thefindingswerereachedafterresearchersusedcomputermodellingandbiomechanicalcalculations
toworkoutthedinosaur'sspeed,agilityand weight.Theybasedtheir calculationsonmeasurements
taken fromafossil dinosaurrepresentativeofan averageTyrannosaurusandconcluded thecreatures
probably weighed between six and eight tonnes.
Calculationsofthelegmusclessuggestthattheanimalwouldhavehadatopspeedoffortykilometres
an hour, which is nothingcompared to acheetah’s one hundred kilometresanhour. It is sobering to
reflect,though,thatanOlympicsprinterrunsataboutthirtyfivekilometresanhour,notsufficientto
outrunaTyrannosaurus,shouldManhavebeenaroundatthattime!
1. Beingknownasthe‘Ferrari of dinosaurs’ meansTyrannosaurusRex:
A: woreshoes.
B:wasaquickandagilecreature.
C:wasahuntingmachine.
D:wasthemostferociousofdinosaurs.
E:Noneofthese.
2. Inturning,aTyrannosauruswouldhave beenhamperedby:
A: its weight.
B:itsbulkylegmuscles.
C:its overall size.
D:itstaillength.
E:Alloftheabove.

Chapter-4 : Comprehension Passages - 273 -

 3. In calculating the size, speed and agility of Tyrannosaurus Rex, scientists used:
A: examination of fossils.
B: biomechanical calculations and computer models.
C:comparisonswith modernanimals.
D:AandBtogether.
E:BandCtogether.
4. Theoverallthemeofthepassageis:
A:Becauseitwascumbersome,TyrannosaurusRexwasluckytosurvive.
B:TyrannosaurusRex’sspeedandagilitywerestillsuperiortothoseofotherdinosaurs.
C:TyrannosaurusRex’sfiercereputationisnowlaidtorest.
D:Comparedtomodernpredatoryanimals,TyrannosaurusRexwasslowandcumbersome.
E:Noneofthese.
Q5 "Anne,"criedMary,stillatherwindow,"thereisMrsClay,Iamsure,standingunderthecolonnade,and
agentlemanwithher.IsawthemturnthecornerfromBathStreetjustnow.Theyseemeddeepintalk.
Whoisit?Come,andtellme.Goodheavens!Irecollect.ItisMrElliothimself."
"No," cried Anne, quickly, "it cannot be Mr Elliot, I assure you. He was to leave Bath at nine this
morning,anddoesnotcomebacktilltomorrow."
As she spoke, she felt that Captain Wentworth was looking at her, the consciousness of which vexed
andembarrassedher,andmadeherregretthatshehadsaidsomuch,simpleasitwas.
Mary,resentingthatsheshouldbesupposednottoknowherowncousin,begantalkingverywarmly
aboutthefamilyfeatures,andprotestingstillmorepositivelythatitwasMrElliot,callingagainupon
Annetocomeandlookforherself,butAnnedidnotmeantostir,andtriedtobecoolandunconcerned.
Her distress returned, however, on perceiving smiles and intelligent glances pass between two or
three of the lady visitors, as if they believed themselves quite in the secret. It was evident that the
reportconcerningherhadspread,andashortpausesucceeded,whichseemedtoensurethatitwould
now spread farther.
"Docome,Anne"criedMary, "comeandlookyourself. Youwillbetoolateifyoudonotmake haste.
Theyareparting;theyareshakinghands.Heisturningaway.NotknowMrElliot,indeed!Youseemto
haveforgotten all about Lyme."
To pacify Mary, and perhaps screen her own embarrassment, Anne did move quietly to the window.
ShewasjustintimetoascertainthatitreallywasMrElliot,whichshehadneverbelieved,beforehe
disappearedononeside,asMrsClaywalkedquicklyoffontheother;andcheckingthesurprisewhich
she could not but feel at such an appearance of friendly conference between twopersons of totally
opposite interest, she calmly said, "Yes, it is Mr Elliot, certainly. He has changed his hour of going, I
suppose,thatisall,orImaybemistaken,Imightnotattend;"andwalkedbacktoherchair,recomposed,
and with the comfortable hope ofhaving acquitted herself well.
From ‘Persuasion’, by Jane Austen.
1. AnnedoesnotbelieveitisMrElliotwhomMaryseesfromthewindowbecause:
A:MarydoesnotknowwhatMrElliotlookslike.
B:MrElliotwastohaveleftBathearlierthatday.
C:itwashighlyunlikelythatMrElliotwouldbeafriendofMrsClay.
D:AandBtogether.
E:BandCtogether.

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2. Anneobviously knowsMr Elliot quitewellfor all thefollowing reasonsEXCEPT:
A:shehasknowledgeofhistravelplans.
B:sheshowsdiscomfortatMaryspottinghim.
C:sheissensitivetowhattheotherladiesmightknow.
D:shehadbeenspeakingaboutMrElliottoothersintheroom.
E:MaryreferstoAnnemeetingMrElliotinLyme.
3. Anne finally goes to the window because:
A:sheknowsinherheartthatitreallyisMrElliot.
B:shewishestoproveMarywrong.
C:shewishestocalmMaryandcoverupherownlackofcomposure.
D:MaryfretsthatMrElliotwilldisappearfromview.
E:Maryiscreatingafussinfrontoftheothersintheroom.
4. FromwhatoccursitcanbeinferredthatAnne:
A:couldn’tcarelessaboutMrElliot.
B:hadnotknownMrElliotlongenoughtorecognisehim.
C:isattractedtoMrElliot.
D:isuncomfortableatMrElliot’sbehaviour.
E:CandDtogether.
Q6 Aharewasverypopularwiththeotherbeastswhoallclaimedtobeherfriend,butonedaysheheard
the hounds approaching and hoped to escape them with the help of her many friends. “What are
friendsfor,”sheasked herself,“ifnottohelpoutintimeof need?”Furthermore,mostofherfriends
werebigandbrave,soatleastoneshouldbeabletohelp.Firstshewenttothehorse,andaskedhim
tocarryherawayfromthehoundsonhisback.Buthedeclined,statingthathehadimportantworkto
doforhismaster.”Ifeelsure,”hesaid,“thatallyourotherfriendswillcometoyourassistance.”She
thenappliedtothebull,andhopedthathewouldrepelthehoundswithhishorns.Thebullreplied:“I
amverysorry,butIhaveanappointmentwithalady.However,Ifeelsurethatourfriendthegoatwill
dowhatyouwant.”Thegoat,however,fearedthathisbackmightbeharmedifhetookheruponit.The
ram,hefeltsure,wastheproperfriendtoapplyto.Soshewenttotheramandtoldhimthecase.The
ram replied: “Another time, my dear friend. I do not like to interfere on the present occasion, as
houndshavebeenknowntoeatsheepaswellashares.”Theharethenapplied,asalasthope,tothe
calf, who regretted that he was unable to help her. He did not like to take the responsibility upon
himself,assomanyolderpersonshaddeclinedthetask.Bythistimethehoundswerequitenear,so
theharehadtotaketoherheels.Luckily,sheescaped.
1. Theharewasconfidentshewouldfindafriendtohelpforallthefollowingreasonsexcept:
A:sheknewshewaspopular.
B:sheassumedfriendsweretheretohelp.
C:mostofherfriendswerebigandstrong.
D:herfriendshad promised help whenever sheneeded it.
E:.shehadawiderangeoffriends.
2. Asuitablemoralforthisstorywouldbe:
A:afriendinneedisafriendindeed.

Chapter-4 : Comprehension Passages - 275 -

 B:neverrelyonyourfriendsinatimeofcrisis.
C: popularity does not mean friendship.
D:friendship doesnot exist amonganimals.
E:inatimeofcrisisyoudiscoverwhoyourtruefriendsare.
3. Thesentencebelowdoesnothaveanypunctuation.Choosetheoptionwiththecorrectpunctuation.
dontyouunderstandwhatImsayingshoutedhisfathergetdownatonce
A:Don’tyouunderstandwhatImsaying,shoutedhisfather.Getdownatonce.
B:“Don’tyouunderstandwhatI’msaying”,shoutedhisfather,“Getdownatonce.”
C:“Don’tyouunderstandwhatImsaying”,shoutedhisfather.“Getdownatonce”
D:“DontyouunderstandwhatI’msaying.”shoutedhisfather.“Getdownatonce”
E:“Don’tyouunderstandwhatI’msaying?”shoutedhisfather.“Getdownatonce.”
4. Choosetheoptionwhichwillbestreplacetheunderlinedwordinthesentencetomakeitcorrect.
The hotel accommodation was luxurious.
A: accommodation
B:accommodation
C: accommodation
D:accommerdation
E:Leaveitasitis.

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 HOMEWORK2

Q1 Readthepassagecarefullyandanswerthequestionsthatfollow:
BitcoinsandothercryptocurrencieswillseeincreasinguseinIndia,accordingtoindustryplayers,who
saythat,rightnow,thesectoristoosmalltoberegulatedbytheReserveBankofIndia(RBI)orFinance
Ministry. Bitcoin companies also say that volatility in the cryptocurrency’s price is likely to continue
sinceitisstillattractingnewinvestorswithinadequateknowledgeaboutthemarket,withspeculation
separately fuelling the price gyrations.
“Thefluctuationhasalwaysbeenthere,butsuddenlytherehasbeenasurgebecauseofafewreasons,”
saidVivekSteveFrancis,CEOofCoinome.“One,thingsthatarehappeninginthemarket.Somecountries
havelegalisedcryptocurrencies likeJapanandKorea,and intheU.S.theyhaveannouncedthatthere
will bebitcoin futures trading.So, this not only givesa legal standing toit,it alsoo pensthe doorto
speculation.”
“Thesecondthingisthatpeopleareseeingothersputin1lakhandmaking10%theverynextday,so
thatisalsobringingalotoflaymenintothis,whichmayormaynotbeagoodthing,”Mr.Francisadded.
Anotherreasonforthepricevolatility,somethingthatwillcontinueforsometime,isthedisaggregated
natureofthebitcoinmarket.“Sincebitcoiniswidelydistributedandthemajorityofitisnotownedby
alimitednumberofpeople,thatmakesitvolatile,”AshishAgarwal,founderofBitsachs,said.“Asfaras
the future is concerned, I won’t want to comment on the price, but adoption will increase. Now, the
serious investors are eyeing bitcoin. No newspaper or serious person would have mentioned bitcoin
fiveyearsago,butnowalleyesareonit.”
WhiletheRBIhascautionedagainstitsuse,informingusers,holders,investorsandtradersdealingwith
virtualcurrenciesthattheyaredoingsoattheirownrisk,SecuritiesandExchangeBoardofIndiaChairman
Ajay Tyagirecently saidthe cryptocurrencyhad so far not posed any systemic risk. He added that the
governmenthadformedapaneltoexamineit.
(1) Whatdoestheword‘volatile’means(Sincebitcoiniswidelydistributedandthemajorityofitis
notownedbyalimitednumberofpeople,thatmakesitvolatile……..)
(a) Violent (b) Unstable (c) High (d) Irrational
(2) Giveasynonymfortheword‘gyrations’asusedinthefirstparagraph.
(a) Evolution (b)Cyclone (c)  Spinning (d)Rising
(3) Whatistheprimaryreasonforlaymentostartbelievinginbitcoin?
(a) It’seasytousenature
(b) Thefactthatthevalueincreasesby10%theverynextday
(c) Thereisnocheckonbitcointransactions
(d) Japan has legalized it.
(4) Whatarethereasonsmentionedforthevolatilityinthecryptocurrencyprice?
(a) Legalized in few countries. (b) Fast money
(c) New investors
(d) Inadequate market knowledge and new investors.

Chapter-4 : Comprehension Passages - 277 -

 (5) AccordingtoMr.AshishAgarwal,whichofthefollowingstatementssaidbyhimarefalse?
(a)Theadoptionofbitcoinwilldecreaseasbuyersarenomoreinterested
(b)Hedoesnotwanttocommentonthebitcoinprice
(c)Fewyearsback,thisconceptwasnotdiscussed
(d)Peoplenowseemtoshowinterestinbitcoin.
Q2 Jallikattu,thebulltamingsportofTamilNadubannedbytheSupremeCourtduetocrueltytothe
animals,isnotjustafolksport.Ithasspawnedaneconomyofitsowninruralpartsofthestate
thathasfarreachingimplications.
BullsthatarerearedforJallikattuareanassetclassofsorts.Forinstance,apoorfarmerbuysa
bullcalffor`15,000.Heraisesittomakeitstrong.Thefeedingandmaintenanceofthebull
costshimnearly`300aday.Thecalfmaturesafteroneandahalfyears.Ifthefarmermakesit
performinJallikattus,hecanwinprizesifitperformswell.Thatalsoraisestheirpricestoafew
lakhs.Goodbullsprovideaveryhighreturnoninvestment.
TheSupremeCourt'sdecisiontobanJallikattuhasbroughtdownpricesofthesportbulls.
From`2lakhto`3lakh,theybegansellingatmere`5,000.Apartfromtheculturalangle,there
isasmalleconomyinvolved.Rearingofsportbullsnotonlygivesmallfarmersandtheruralpoor
achancetomakealowinvestmentinacalfandgetabigreturnifitperformswellinaJallikattu;
rearingaJallikattubullalsosupportsarangeofruralpoorwhomakeaccessoriesforthebull.
SinceaJallikattubullisamatterofpridefortheownerandapotentialmeansofhighreturn,itis
decoratedwithvariousaccessoriesmadebyruralartisans.RichownersofJallikattubullsemploy
anumberofpoorworkersfortheupkeepofthebull.
Also,alotofmoneyisspentonaJallikattuevent.Itrangesfrom`50,000to`20lakh.Dozensof
JallikattuswereorganisedbeforethelegalinterventionbyPETA.Jallikattusarebigeventsthat
drawpeopleinthousands.Theygeneratealotofconsumptionaroundthem,whichissignificant
fortheruralpoor.
(1) Whyhasthepriceofsportsbullsreduced?
(a) Bulls arenotbeingfedproperly
(b) Farmershavebecomepoorandhencedonotcarefortheirbulls.
(c) Peoplearebuyingcowsmore thanbulls
(d) TheSupremecourtbanonJallikattu.
(2) WhatamountapproximatelyisspentonaJallikattuevent?
(a) Thousands (b) Ten thousands (c) Crores (d) Lakhs.
(3) Howdogoodbullsofferahighreturnoninvestment?
(a) Thebullbecomesstrongeronbecomingasportsbull
(b) Thepriceofabullincreasesafteritswin.
(c) TheSupremeCourtawardstheownerofawinnerbull
(d) Notstatedinthepassage.
(4) WhydoesJallikattubullrearingeffect peopleother thanthe owner?
(a) It offers distribution of money.
(b) Itinvolvespeoplewhomakeaccessoriesandhelpinrearingofthebull

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 (c) All villagers own one bull.
(d) Theownerhastopayofhisdebts.
(5) WhywasthefolksportJallikattubannedbytheSupremeCourt?
(a) Not many people were interested in it
(b) Thebullswerenotproperlyfedtoplaythesport
(c) Itcausedcrueltytotheanimals.
(d) Allof the above.
Q3 SomepolarbearsintheArcticaresheddingweightduringthetimetheyshouldbebeefingup,astudy
shows.It'stheclimatechangedietandscientistssayit'snotgood.Theyblameglobalwarmingforthe
dwindlingicecoverontheArcticOceanthatbearsneedfor huntingsealseachspring.Thescientists
spiedonpolarbearsbyequippingninefemalewhitegiantswithtrackingcollarsthathadvideocameras
andthebearequivalentofaFitbitduringthreerecentsprings.Thebearswerealsoweighed.
What thescientistsfound is that five of the bearslost weight and four lost 1.3 to2.5kgper day.The
averagepolarbearstudiedweighedabout175kg.Onebearlost23kginjustninedays."You'retalkinga
prettyamazingamount ofmass tolose," said USGeologicalSurvey(USGS)wildlife biologistAnthony
Pagano, lead author of the study. Researchers studied the bears for 10 days in April, when they are
supposedtobeginputtingonweightsotheycanlaterhavecubs,feedthemandsurvivethroughthe
harsh winter. But because the ice is shrinking, the bears are having a harder time catching seal pups
even during prime hunting time, Pagano said. The US Fish and Wildlife Service lists polar bears as a
threatefinedspecies.Polarbearshuntfromtheice.Theyoftenwaitforsealstopopoutofholestoget
airandatothertimestheyswimafterseals.Ifthereislessseaiceanditisbrokenapart,bearshaveto
travel more  —  often swimming  —  and that has serious consequences, such as more energy use,
hypothermia and risk of death, said University of Alberta biology professor Andrew Derocher. It was
foundthatontheice,thepolarbearsburnup60%moreenergythanthought,basedonthesefirstreal
life measurements done on the ice.
(1) Givethepassageasuitabletitle
(a) PolarBearsindanger (b) Arctic ice melting
(c) Seals,nomoreaprey! (d) Change in climate
(2) Giveasuitableantonymfortheword‘dwindling’mean,asusedinthepassage.
(a) Flourish (b)Coverup (c)Reduce (d)Amount
(3) Whichofthefollowingsentencesistrueaccordingtothepassage?
(a) Sealspopoutoficeforfun.
(b) Dwindlingiceisamajorconcernforthepolarbears
(c) Globalwarminghasnothingtodowiththerecedingicecover
(d) Lessicemeanseasycatchofsealsforbears
(4) Polarbearshuntfor
(a) Seals (b)Otherbears (c)Iceglaciers (d)Bothaandb
(5) Whatistheprimaryaimofthestudybyscientists,inthepassage?
(a) Polar bearshave stopped eatingseals
(b) Polarbearsarelosingweightinaseasonwhentheyshouldbegainingit.
(c) ThedwindlingicecoverontheArcticOcean.
(d) Onlyaandb.

Chapter-4 : Comprehension Passages - 279 -

Q4 Readthe passagecarefullyand answerthequestions givenbelow:
“Yourroomissouglythatnoonecanenteryourroomexceptyourself,son.Pleasetakecareofyourself
at least. “Harish’s mother was simply shouting at Harish. It was a beautiful Sunday morning and. Harish
wasinnomoodtogetupfrombedevenitwasalready9.00A.M.Hismotherhadcompletedcleaning
thewhole houseexceptHarish’sRoom. Harishgotupandfinishedhisdailyroutine.Still,hewasonly
at the receiving end. “All your friends have finished morning walk, breakfast and completed their
weekly homework given in the college.Just clean yourroomandtakethe whole garbage and throw
outside.” Harish was surprised. What is mom speaking about? Yesterday only his mom was teaching
himabout“SwachhBharatAbhiyan”andtodayaskinghimtothrowthegarbageoutside!“What’sthis
Mom?Youadvisedmesomuchandtodayaskingtothrowgarbageoutside?”Harishhadtwooptions,
eithertofollowhismother’slastnightadvice ortofollowherpresentorder.
Hedecidedtofollowthefirstandraisedobjection.HisMomsaid,“Itwasjustabookson,Iwasteaching
from that only. “Harish still objected and threw the garbage inside a dustbin, located around 200
metresawayfrom hishouse.
Isitonlyamatterofreadingonly?Isreallycleanlinessnot,necessary?Isitadutyofthepoliticiansand
Government servants? Harish asked himself all the questions to himself and decided to do what he
thoughttobeproper.Ifallofuswithalittleefforttryitinourdailylife,slowly,butsurelywecanclean
ourenvironment.Onlyweareresponsibleforallthisnonsense.Thereforewehavetoact.Wehaveto
avoid the useof polythene bags tosave our environment; we have to give up our habit of throwing
garbageandusedplasticbagsandbottleshereandthere.Otherwisedaywillcome,whenweandour
futuregenerationwillbestrugglingtofindacleanroadtowalk.Thinkseriouslyandactaccordingly.
(i) What was the subject matter of the book, which Harish’s mother was teaching him lastnight?
(1Mark)
(ii) Whohastoactproperlytoensureacleanenvironment? (1Mark)
(iii) Whowillsuffer ifwedonotensurecleanenvironment? (1Mark)
(iv) Writeasummaryoftheaboveparagraph. (2Marks)[Sugg.Nov18]
Q5 Read the passage carefully and answer the questionsgiven below
Coralreefsareoneofthemostfragile,biologicallycomplex,anddiversemarineecosystemsonEarth.
Thisecosystemisoneofthefascinatingparadoxesofthebiosphere.Foundalongtheseacoaststhey
are formed in various shapes and sizes. They constitute as one of the beautiful creationsof nature.
Symbioticcellsofalgaeknownaszooxanthellaecarryoutphotosynthesisusing themetabolicwastes
ofthecoraltherebyproducingfoodforthemselves,fortheircorals,hosts,andevenforothermembers
of the reef community.Thissymbiotic processallows organisms in the reefcommunity to use sparse
nutrient resources efficiently.
Unfortunatelyforcoralreefs,however,avarietyofhumanactivitiesarecausingworldwidedegradation
ofshallowmarinehabitatsbyaddingnutrientstothewater.Agriculture,slashandburnlandclearing,
sewagedisposalandmanufacturingthatcreatewastebyproductsallincreasenutrientloadsinthese
waters. Typical symptoms of reef decline are destabilized herbivore populations and an increasing
abundance of algae and filterfeeding animals. Declines in reef communities are consistent % with
observations that nutrient input is increasing in direct proportion to growing human populations,
thereby threatening reefcommunities sensitive to subtle changes in nutrient inputto their waters.
(i) Whataretheindicatorsofreefdecay? (1Mark)
(ii) HowdoesAlgaecarryouttheprocessofphotosynthesis? (1Mark)
(iii) Howismanresponsiblefordestructionof NaturalReef? (1Mark)
(iv) WriteaSummaryoftheabovePassage. (2Marks)[Sugg.May19]

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Q6 Read the passage carefully and answer the questions given below:
Alifeofactionanddangermoderatesthedreadofdeath.Itnotonlygivesusfortitudetobearpain,but
teaches us at every step the precarious tenure on which we hold our present being. Sedentary and
studious men are the most apprehensive on this score. Dr. Johnson was an instance in point. A few
years seemed to him soon over, compared with those sweeping contemplations on time and infinity
withwhichhehadbeenusedtoposehimself.Inthestilllifeofamanofletterstherewasnoobvious
reasonforachange.Hemightsitinanarmchairandpouroutcupsofteatoalleternitywouldithad
beenpossibleforhimtodoso.Themostrationalcureafterallfortheinordinatefearofdeathistoset
ajustvalueonlife.Ifwemerewishtocontinueonthescenetoindulgeourheadstronghumourand
tormentingpassions,we hadbetter begoneatonce;andifweonlycherishafondnessforexistence
accordingtothegoodwedesirefromit,thepangwefeelatpartingitwillnotbeveryserver.
(i) WhattypeofpeopleareafraidofdeathandWhy? (1Mark)
(ii) Howcanwegetridoffearofdeath? (1Mark)
(iii) WhatideadoyouformaboutDr.Johnsonfromthispassage? (1Mark)
(iv) WriteSummaryofthePassage. (2Marks)
[Sugg.May18]
Q7 Readthe passagecarefullyand answerthequestions givenbelow:
Beingthedaughterofaphysicsprofessor,Mariewhowasbornin1867inWarsaw,Poland,wasgreatly
influenced by the wonders of Science and technology. Since an early age, she displayed a blithe
personality.Her fascinationforlearningpromptedhertocontinue withherstudieseven afterschool.
She become disgruntled, however, when she learned that the university in Warsaw was closed for
women.Determinedtocompletehighereducation,she,defiantlyleftPolandandin1891enteredthe
Sorbonne, a French university, where she completed her doctorate in physics.  
Marie met Pierre Curie at the Sorbonne along with some of the other greatest scientists of her day.
Marie and Pierre were married in 1895 and spent many productive years working together in the
physics laboratory. A short time after they discovered radium, Pierre was killed by a horsedrawn
wagon in 1906. For Marie it was an horrible misfortune and heartbreaking event. Despondently she
recalled their close relationship andthe joy thatthey had sharedin scientific research. The fact that
shehadtwoyoungdaughterstoraisebyherselfgreatlyincreased herdistress.
Curie’s feeling of desolation finally began to fade when she was asked to succeed her husband as a
physicsprofessorattheSorbonne.Shewasthefirstwomantobegivenaprofessorshipattheworld
famousuniversity.In1911shereceivedtheNobelPrizeinphysicsforisolatingradium.AlthoughMarie
Curie eventually suffered a fatal illness from her long exposure to radium, she never became
disillusioned about her work. Regardless of the consequences, she had dedicated herself to science
andtorevealing the mysteriesofthephysicalworld.
(i) WhatdidMariedidnotlikeabouttheWarsawUniversity? (1Mark)
(ii) WhatwasfirststepthatMarietooktowardsherbecomingascientist? (1Mark)
(iii) HowdidMariedealwith thedesolationcausedbyherhusband’sdeath? (1Mark)
(iv) WriteaSummaryoftheabovePassage. (2Marks)
[Sugg.Nov19]

Chapter-4 : Comprehension Passages - 281 -

Q8 Readthe passage carefullyand answerthequestions thatfollow:
A sanctuarymay be defined asa place where Man is passive and the rest of Natureactive. Till quite
recently Nature had her own sanctuaries, where man either did not go at all or went only as a tool
using animal in comparatively small numbers. But now, in this machine age, there is no place left
where man cannot go with overwhelming forces at his command. He can strangle to death all the
noblerwildlifeintheworldtoday.Tomorrowhecertainlywillhavedoneso,unlessheexercisesdue
foresight and selfcontrol in the meantime.
Thereisnottheslightestdoubtthatbirdsandmammalsarenowbeingkilledoffmuchfasterthanthey
can breed. And it is always the largest and noblest forms of life that suffer most. The whales and
elephants,lionsandeagles,go.Theratsandflies,andallmeanparasites,remain.Thisisinevitablein
certaincases.Butitiswantonkillingoffthatisofconcern.Civilizedmanbeginsbydestroyingthevery
forms of wild life he learns to appreciate most when he becomes still more civilized. The obvious
remedy is to begin conservation at an earlier stage, when it is easier and better in every way, by
enforcing laws for close seasons, game preserves, the selective protection of certain species, and
sanctuaries.
IhavejustdefinedasanctuaryasaplacewheremanispassiveandtherestofNatureactive.Butthis
generaldefinitionistooabsoluteforanyspecialcase.Themerefactthatmanhastoprotectasanctuary
doesawaywithhispurelypassiveattitude.Then,hecanbebeneficiallyactivebydestroyingpestsand
parasites, like botflies or mosquitoes,and by finding antidotes for diseases like the epidemic which
periodicallykillsofftherabbitsandthusstarvesmanyofthecarnivorestodeath.But,exceptincases
where experiment has proved his intervention to be beneficial, the less he upsets the balance of
Naturethe better,even whenhetries tobeanearthlyProvidence.
1. Whatcanmandotoavoidkillingallwildlifeinthefuture?
(a) Experiment more
(b) Have aforesight
(c) Maintain self control
(d) Bothaandb
2. Whataccordingtotheauthorisasanctuary?
(a) AplacewhereManisactiveandsoisNature
(b) AplacewhereManispassiveandsoisNature
(c) AplacewhereManispassivebutNatureisactive
(d) AplacewhereManandNaturedonotcoexist.
3. Whataccordingtotheauthorcanleadtothedeathofcarnivores?
(a) Findingantidotesforepidemics, whichmightkill animalthatarefood for carnivores
(b) Conservationatalaterstage
(c) Carnivores can die anytime.
(d) Manisegoisticandwantstobepowerfulthancarnivores.
4. Find the word in the passage that means ‘unprovoked’or‘deliberate’
(a) Beneficially
(b) Wanton
(c) Inevitable
(d) Providence
Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-282 -
 5. Whatdoestheauthormeanbythephrase‘earthlyProvidence’inthelastlineofthepassage?
(a) TheEarthisGod
(b) ManisinferiortoGod.
(c) GodwillnottakecareoftheEarth
(d) ManwantstobelikeGodonEarth.
[MTPApril19,1Markeach]
Q9 Readthe passage carefullyand answerthequestions thatfollow:
The window offered a view of the house opposite. The two families did not speak to each other
becauseofapropertydispute.Oneday,Ruchira’stextbookslayuntouchedastheyounggirl’sgazewas
onthehappeningsin thehouseopposite.Thereweretwonewfacesintheneighboringhousehold–
thatofanelderlywidowandagirlagedsixteen.Sometimestheelderlyladywouldsitbythewindow,
doingtheyounggirl’shair.Onotherdaysshewasabsent.
The new young neighbour’s daily routine could be seen through the window – she cleaned the rice
paddy;splitnuts,putthecushionsinthesuntoairthem.Intheafternoons,whilethemenwereallat
worldsomeofthewomensleptandothersplayedcards.Thegirlsatontheterraceandread.Sometimes
she wrote. One day there was hindrance. She was writing when the elderly woman snatched the
unfinished letter from her hands. Thereafter the girl was not to be seen on the terrace. Sometimes
duringthedaysoundscamefromthehouseindicatingthatamassiveargumentwasgoingoninside.
Afewdayspassed.OneeveningRuchiranoticedthegirlstandingontheterraceintears.Theevening
prayerwasinprogress.Asshediddaily,thegirlbowedseveraltimesinprayer.Thenshewentdownstairs.
ThatnightRuchirawrotealetter.Shewentoutandposteditthatveryinstant.Butasshelayinbedthat
night,sheprayedferventlythatherofferoffriendshipwouldn’treachitsdestination.Ruchirathenleft
for Madhupur and returned when it was time for college to start. She found the house opposite in
darkness,locked.Theyhadleft.Whenshesteppedintoherroomshefoundthedeskpiledwithletters
–onehadalocalstamponitwithhernameandaddressinunfamiliarhandwriting.Shequicklyreadit.
Theycontinuedtowritetoeachotherforthenexttwentyyears.
(i) WhydidRuchirawritealettertohernewneighbour?
(a) Shewanted toofferher,herhelp.
(b) Shewantedtobefriendswithher.
(c) To apologize for her family’s behaviour towards her family
(d) Toencouragehertocontinuelearningtoreadandwrite.
(ii) WhichofthefollowingisTRUEinthecontextofthepassage?
(a) Theyounggirl wasvery devout and prayed everyday.
(b) Onlytwo letters wereexchanged between the two girls.
(c) Thenewyoungneighbourwasaservant.
(d) Theafternoonwasatimetorelaxforeveryone.
(iii) Howdidthenewyoungneighbourspendherdays?
(a) ShewasbusywritingletterstoRuchira
(b) Sheusedtodaydreamaboutherpastexperiences.
(c) Shewouldattendto theneedsofthe widow.
(d) Shespenthertimelearningtoreadandwrite.

Chapter-4 : Comprehension Passages - 283 -

 (iv) Whywastheyoungneighbourpreventedfromsittingontheterrace?
(a)Sheusedtowhileawayhertimeinsteadofworking
(b)Theoldwomancouldnolongerkeepaneyeonher.
(c)Shehadnotfinishedwritingthelettershewasaskedto.
(d)Shehadbeenwritingaletterwhichshewasn’tsupposedto.
(v) Whatwasthemajorargumentinthehouseabout?
(a) There were too many people livingthere,which resulted in arguments.
(b) Theyoung girl wasinsistingon attending college.
(c) Theyounggirlhadbeenwastinghertimeinsteadofworking.
(d) Theoldwomandidnotguardtheyounggirlclosely. [MTPMarch19,1Markeach]
Q10 Readthe passage carefullyand answerthequestions thatfollow:
Cybercrime is a crime which happens online or primarily online. Cybercriminals commit crimes by
targeting computer networks or devices. One of the most common methods is by hacking. Other
cybercrimesincludecyberstalking,childsexualexploitation,harassmentandbullying.Hackingmeans
violating IT (Information Technology) Act, and intervening into a computer, or a network system for
specific goals, such as stealing money, gaining fame, stealing of confidential data etc. or to exploit
someone. The person involved in hacking purpose is known as hacker. Hacker are categorised into
threetypes:(i)WhiteHathacker,(ii)BlackHathackerand(iii)GreyHathacker.
WhiteHathackersarealso knownasethicalhackers.White hackers are legalhackerand they never
intenttoharmacomputerorsystem,rathertheyfindoutloopholesinacomputeroranetworksystem
tokeepthesystemsafefrombeinghacked.BlackHathackersarecalledcrackerswhogainunauthorised
access to a system to harm or steal sensitive information. They find loopholes to gain access to a
system.Whilegreyhathackersaremixtureofbothblackhatandwhitehathackers.Theydoitforfun
without the owner’s consent.
Somemethodstoprotectyourselfsafefromcybercrimesare:(i)keepsoftwareupdated,(ii)usestrong
passwords,(iii)managethesocialmediasettingsasperyourprivacy,(iv)talktochildrenaboutinternet,
(iv) keep an eye on kids using parental control, (v) keep your identity safe, (vi) do not click on any
unknownlink,(vii)knowwhatdobedoneifyoubecomeavictim.Childrenaremostcommonvictims
of cybercrime. So keeping an eye on children action is very important. Cybercrimes cases in India
registered under the IT Act, increased between 2011 and 2014. In 2015,there were 11,592 cases of
cybercrimeinIndia.Cybercrimecasesareincreasingdaybyday.Protectionfromcrimeisinyourhands.
Souseinternetwisely.Bewareofcrimeelsecrimewillnotawareyou.
(1) Reasonforincreaseincybercrimeare:
(a) Increased use of internet (b) Unawareness ofcybercrime
(c) Ignorance ofprivacy setting (d) Need of Digitalization
(2) Childrenare commonvictimofcybercrimebecause:
(a) They are innocent (b) Lackofinformationaboutinternet
(c) Lackofparentawareness (d) Both(a)and(c)
(3) Whichactionshouldnotbetaken?
(a) Creatingalongpassword (b) Activating Internet Security
(c) Creating Database without password (d) Using Parental control

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 (4) Synonymoftrailis:
(a) Harassment (b) Bullying
(c) Intervening (d) Stalking
(5) Thewordassentmeans:
(a) Stealing (b) Consent
(c) Mixture (d) Beware
[MTPOct19,1Markeach]
Q11 Readthe passage carefullyand answerthequestions thatfollow:
Haveyoueverthoughtofhowmanywaystherearetomakemusicalsounds?Youcanmakemusicwith
your own body. You can sing, clap and snap your fingers or whistle. Musical instruments allow us to
makemusic beyondwhat ourbodies arecapable of.They allow us tomake rhythmicprecisesounds,
pleasing to the ears. Bands or orchestras are made up of groups or families of musical instruments.
Each family of instruments adds something unique to the music. Strings are one family of musical
instrumentsliketheguitar.Itisplayedbythestringsbeingstruckwithfingers.Aviolinhasstringstoo,
butaviolinplayerusesabowtomakemusic.Abowisasmoothtoolthatslidesoverthestringsand
makes different sounds.
Windinstrumentsmakeupanotherfamily.Windinstrumentsproducemusicbymovingcurrentsofair.
Theflute,saxophonearesuchinstruments.Theyaretubeshapedandafluteplayerwillblowairinto
itthrough ahole while playingit.
Haveyoueverseenorheardtheclarinet?Itisawindinstrumenttoo.Clarinetplayersblowonareed
inthemouthpiece.Thereedvibratesandsetstheairinsidetheclarinettubeinmotion.
Anotherfamilyofmusicalgadgetsispercussioninstruments.Drums,tablas,dholkasetc.fallunderthe
category.Skinsofanimalsarestretchedoveranemptycontainerandstrucktomakerhythmicsounds.
(1) Findawordfrom thepassagethatmeans‘exclusiveorspecial’
(a) Percussion (b) Unique (c) Rhythmic (d) Snap
(2) Abandisa……..
(a) Anemptycontainerusedtoplaymusic (b) A tube shaped instrument
(c) A musical gadget (d) Agroupofmusicalinstruments
(3) Whichofthefollowingisnottrueasperthepassage?
(a) Wecannotmakemusicbeyondwhatourbodiesarecapableof.
(b) Areed isrequired forclarinet players
(c) Saxophoneis anexample of awindinstrument
(d) Stringinstrumentscanbeplayedusingabow.
(4) What are percussion instruments?
(a) Clarinets, dholaks and drums (b) Tablas, flutes and clarinets
(c) Drums,tablasanddholaks (d) Saxophone, guitar, dholaks.
(5) Givethe passageasuitabletitle
(a) Different types of musical instruments (b) BandsandOrchestras
(c) Families of musical instruments (d) Bodycanmakemusic
[MTPAug18,1Markeach]

Chapter-4 : Comprehension Passages - 285 -

Q11 Readthefollowingcomprehensionpassagesandanswerthefollowingquestions.
Inthepresenteraof globalisationandliberalisation, theworldhas become aneconomic village.The
globalizationof the businessworld,theattendant structure andthe regulations, which support it,as
wellasthedevelopmentofecommercemakeitimperativetohaveasinglegloballyacceptedfinancial
reporting system. Several multinational companies are establishing their businesses in various
countrieswithemergingeconomicandviceversa.Theentitiesinemergingeconomiesareincreasingly
accessingtheglobalmarketstofulfilltheircapitalneedsbygettingtheirsecuritieslistedonthestock
exchanges outside the country. Capital markets are, thus, becoming integrated consistent with this
worldwidetrend.MoreandmoreIndiancompaniesarebeinglistedonoverseasstockexchanges.The
use of different accounting frameworks in different countries, which requires inconsistent treatment
andpresentationofthesameunderlyingeconomictransactions,createsconfusionforusersoffinancial
statements. This confusion leads to inefficiency in capital markets across the world. Therefore,
increasingcomplexityofbusinesstransactionsandglobalizationofcapitalmarketscallforasingleset
of highquality accounting standards.
High standards offinancial reporting underpin the trust investors placeinfinancial and nonfinancial
information. Thus, the case for a single set of globally accepted accounting standards has prompted
manycountriestopursueeitheradoptionorconvergenceofnationalaccountingstandardswithIFRS.
InternationalFinancialReportingStandards(IFRC)areconsidereda“principlesbased”setofstandards.
In fact, they establish broad rules rather than dictating specific treatments. Every major nation is
movingtowardadoptingthemtosomeextent.Largenumberofauthoritiesrequirespubliccompanies
tosueIFRSforstockexchangelistingpurposes,andinaddition,banks,insurancecompaniesandstock
exchangesmayusethemfortheirstatutorilyrequiredreports.Soeverthenextfewyears,thousands
ofcompanieswilladopt the internationalfinancialreportingstandards whilepreparingtheirfinancial
statements.
1. Whattrendsareforcingcapitalmarketsacrosstheworldforintegration?
2. Which creates confusion for users in financialstatements?
a. Different accounting framework
b. Different capital market framework
c. Globalisation and business regulations
d. Development of ecommerce
3. Which isnotconsidered asa‘principlebasedsetof standardsforpreparationoffinancialreporting?
a. Indian Accounting Standards
b. International Accounting Standards
c. International Financial Reporting Standards
d. International Economic Standards
4. Whichstandardsaretakenasbasisforpreparingfinancialstatements?
a. International Economic Standards
b. International Financial Reporting Standards
c. StandardStockExchange
d. Businessstructures and regulations standards
5. Whythereis needforsinglesetofglobalfinancialreportingstandards? [RTPMay20]

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Q12 In today’s ITdriven society, the success of an enterprise is heavily influence by business intelligence.
Corporategiantsarebecomingmoredependentonbusinessintelligence(BI)softwaretoincreasethe
amount of knowledge they can apply in real time and reduce the cost of managing their business
processes. As globalisation and ICT(Information andCommunication Technology)become moreinter
twined, the volume of data transfersamong enterprises is exponentially growing. In this perspective
we can define the BIis essentially timely, accurate, highvalue, and actionable business insights, and
the work processes and technologies used to obtain them. It comprised of information that contains
patterns, relationships, and trends about customers, suppliers, business partners and employees. In
simplewordsBIreferstotheprocessofcollectingandrefininginformationfrommanysources,analyz
ingandpresentingtheinformationinusefulwayssothatuserscanmakebetterbusinessdecisions.
BIhasbeenmadepossiblebecauseofadvancesinanumberoftechnologies,suchascomputingpower,
data storage, computational analytics, reporting and networking. IT providesan approach for solving
business problems with a framework for managing tactical and strategic operations performance.
Fromtheperspectiveofdecisionmaking,BIusesdataaboutyesterdayandtodaytofacilitatemaking
betterdecisionsabouttomorrow.Thisisdonethroughvariousmeanssuchasselectingtherightcriteria
to judge success, locating and transforming the appropriate data to draw conclusions, or arranging
information in a manner that best providesinsights into the future thus making enterprises to work
smarter. BI enables managers to see things with more clarity and empowers them to peek into the
possible future.
1. To sustainin the business world for decision making and selecting the criteria of succeed, corporate
giantsaremoredependedon____________
a. ITdriven society
b. Business Intelligence software
c. Strategic Operation Performance
d. Reporting and Networking
2. ThewriteusesthetermBItodefine–
a. Increasing the amount ofknowledge in business world
b. Empowers business for future perspective
c. Particularly arranging information in business manner
d. Appropriate work processes and technologybased business
3. WhatarethebasicrequirementsofBI?
4. WhatistheprocessofBI?
5. BIisusedfor_______
[RTPMay20]
00

Chapter-4 : Comprehension Passages - 287 -

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Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-290-
 CHAPTER5
NOTEMAKING

Q1 WHATDOYOUUNDERSTANDBYNOTEMAKING?
Notemakingisanessentialstudyskill.Accordingtoadictionarydefinition,notemakingisthepractice
ofrecordinginformationfromanothersource.Thesourcecouldbeabook, anevent,ameetingora
generaloraldiscussion.Notemakingisusefulasgoingthroughbulkydocuments(bothhardcopyand
softcopy),listeningtolonglecturesandattendingdaylongconferencestryingtorememberwhatwas
preached, canbe verytedious.
Q2 WHATARETHEADVANTAGESOFNOTEMAKING?
A. Oneofthechiefadvantagesisthatthelearnercanmakenotesinapatternthathe/sheiscomfortable
and familiar with.
B. Notesareusefulrecordsofimportantpointsforfutureuse.Theyaidinwritinginamoreorganisedand
plannedmannerasyoucanseewhatinformationyouhave.
C. Notemakingalsohelpsinorganisationasyoucanrearrangeandremembernotesinadifferentorder.
D. Makingnotesthatareeffectiveisaboutmakingsenseofthematerialinamannerthatispersonaland
individualized, thus ensuring a better understanding.
E. Notemakinghelpslearnersmastertheartoflearningvolumesoftextquickerandaidsinsavingtime
while revising, particularly before exams.
Q.3. WHATARETHESTRATEGIESFOREFFECTIVENOTEMAKING?
 A.Frameaheading/titlebasedonthemainidea.Itshouldbeshort.Avoidusinglongsentencesasa
title.
 B.Ignoreinformationorpointswhicharelessimportant.Beasbriefandspecificpossible.Leaveout
examples and other unnecessary details.
 C. Systematically dividing and subdividing the important information, write the points in logical
sequence.
 D.Though youwrite inphrases orpointsonly, the informationshould becomplete.
 E.Leavenospaceforambiguity
 F. Avoid adding your own interpretation.
 G.EnsurethatyouDONOTchangetheauthor’sintendedmeaning.
 H. Abbreviate oftenrepeated terms or lengthy words. Any abbreviation used should not hamper
comprehension.

Chapter-5 : Note Making - 291 -

Q.4 WHATDOYOUMEANBYNOTEMAKINGANDNOTETAKING?
Often the two terms, note taking and note making, are used synonymously. But wemust distinguish
between the two as there are subtle differences between them.
Notetakingshouldberegardedasthefirststageoftheprocessandshouldleadtonotemaking.
S.NO. NOTEMAKING NOTETAKING
1. Notemakingisaactiveprocess Notetakingisapassiveprocess
2. Notemakingassistsyour InnotetakingInformationisoftencopiedfromthe
understanding of new material originalsourceandrewritteninasimilarlayout.
ifthenotesareorganizedinyour
ownwayandinyourownwords.
3. Theattemptistoproducenotes Itinvolvestakingdownwhatisheardorreadwithout
thatareorganizedinawaythat actually processing the information
makesmoresenseorleadstomore
connections between them.
4. Notemakingmakesiteasierto notesbeingtakenareoftenunselective,tryingtocover
distinguish between important asmuchoftheinformationaspossiblewithout
issues and detail highlightingthe main points or issues.
Q.5 WHATARETHEVARIOUSSTYLESOFNOTEMAKING?
As mentioned earlier, note making allows one to skim and scan through available sources and make
note of the desired knowledge in a form that is not only easy to write, easy to read but also less
theoretical.Therefore, therearevarious waysinwhichone can presenttheirnotes.
Typically,therearetwostylesofnotemaking:LinearandNonlinear.
I) LinearNoteMaking
¾ Linear notemaking is the simplest, therefore, themost common style of note making used by
people.
¾ In this form of note making, notes are written down the page, one line after the other in a
structured manner.
¾ Such notes include headings for main ideas and concepts, subheadings for main points within
those ideas.
¾ Linear notes include use of key words, underlining, indentation, and use of abbreviations.
Example:
NoteMakingTips

A. Reading
A.1 read twice
A.1.11sttime–identifymainidea
A.1.22ndtime –identify important points
A.2ULimp.words

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 B. Planning–divisionofcontentacc.toB.1theme
B.2 importance
B.3 time
C. Writing
C.1 sub  headings
C.1.1 about3–4
C.1.2 use phrases
C.1.3 ignore unimportant info.
C.1.4 indent and number subheadings and sub points
C.2 abbreviation
C.2.1 abbreviatelongwords/oftenrptedwords
C.2.2 usecommonsymbolsandacronyms
II) NonLinearNoteMaking
¾ Non linear notes have some distinctive patterns.
¾ Theypresent and connectideas in diagrammatical, nonlinear forms.
¾ Nonlinearstylesofnote makinginclude mind maps, tables,flowcharts, andtree diagrams.
¾ Thistechniquehasanumberofadvantages.Itenablesyoutoseealargeamountofinformation
ononepageandthe connectionsbetweenthekeyconceptscanbe showneasily.
Q6 WHATDOYOUMEANBYMINDMAPPING?
Mindmappingisamorevisualrepresentationofinformation.
¾ Ideasarepresentedinadiagramform.
¾ Themindmapstartswithamainconceptandbranchesouttootherconceptsrelatedtothemain
idea.
¾ Eachoftheseiscomparabletothesubheadinganddetailsinlinearnotemaking.
¾ Mind maps can include images, words, symbols and other visual representations of concepts.
Moreover,additionalinformationcanbeincludedeasilyandtheopenendednatureofthepattern
means thatnewconnectionscanbemadeeasily.

:em
lp
axE

Chapter-5 : Note Making - 293 -

 Atableismostcommonlyusedtomakecomparisons.Thisformofnotemakingisanextremelysimple
and effective way of presenting differences and similarities with clarity.
Example:
LinearNote Making NonLinearNote Making
Connections between ideas are clear Connections between ideas are quite clear
Not very visually appealing Very visually appealing
Very difficult to add information later Normallyeasyto add informationlater
Structured Notvery structured
Madeusingaformat Noxedformat
Q.7. WHATISAFLOWCHART?
AFlowchartisausefulformofnotes.Itisbestusedwhenaprocessorachangeovertimeneedstobe
depicted. Aflowchart usually has steps shown in boxes connected byarrowswhich give one an idea
aboutthesequenceofeventsortheprocess.

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Q.8 WHATISATREEDIAGRAM?
Atreediagram,ifturnedupsidedown, resembles atree.Theyareusedtoshowclassification.
Example:

MECHANICSOFLINEARNOTEMAKING
I) Format
Atypical notemakingformatshould looksomewhat likethis:
Heading
I. SubHeadingIa.subpoint
Ib. sub point
Ic. sub point
Ic(i).sub–subpoint
Ic(ii).subsubpoint
II. Sub Heading
IIa. sub point
IIa(i).sub–subpoint
IIa(ii).subsubpoint
IIa(iii).sub–sub
pointIIb.subpoint

Chapter-5 : Note Making - 295 -

 IIc.sub point
III. Sub Heading
III a.subpoint
III b.subpoint
III c.subpoint
IIIc(i).sub–subpoint
Key:
Abbreviations used
Symbols used
II) Heading/title
Thisbasicallyreferstothetopicinquestion.Asuitableheading/titlemakesiteasytoconnectwiththe
topic,orsubjectofdiscussionforwhichthenoteshavebeenmade.Youcanchooseatitleforthenotes
byidentifyingthemainideaorthemeofthegivenpassageortext.Keepthetitleasshortaspossible.
Avoidusinglongsentences.Titlesfornoteshavetobedirectandtothepoint.Theyusuallywillanswer
thequestion‘Whatisthearticle/text/reportabout?’
Example:CareersinCommerce;HealthyLiving;SocialMedia:ABane;MutualFunds:RisksandReturn
III) Subheading
Thesubheading,asthenamesuggests,isasubordinatedivisionofthemaintopic.Inotherwords,itis
theheadinggiventothesubsectionofanarticle,report,oranyevent.Underthesubheadingwould
follow details (sub – points and subsub points) of the subsection/topic, which is part of the main
topic.SoifthesubheadingisnumberedasRomannumeralI,detailswouldfollowassubpointIa,and
sub–subpointsIa(i)andsoon.
ForExample
ElectronicCommunication Heading
1. Typesofcommunication o Subheading

NOTE:Try tokeepthenotes(subheadings, subpoints and subsub points) asbrief aspossible. Most

texts oressayscanbedividedintothe followingsub headings:
I) Facts, causes, benefits, and suggestions (for positive content)
II) Facts, causes, consequences, and solutions (for negative content)
III) Facts, advantages and disadvantages
IV) Past, Present,and Future

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 IV) Indentation
Theactofproperalignmentandspacingofwrittenmatteriscalledindentation.
Inlinearnotemakingindenting,i.e., shiftingfromthemarginisused toclearly indicatesubheadings,
sub–points and subsub points.
Similarly, subheadings, though separated by points are placed below one another. Sub  points and
subsubpointstoocome belowone another.
Such use of indenting gives your notes a visual character. You can see the main idea and its various
aspectsataglance.
Thesedays,withtheextensiveuseofgadgets,suchascomputersforwriting,indentationhasbecome
aneasytask.UserfriendlysoftwarelikeMSWord,MSExcel,etc.,takecareofheadings,subheadings,
bullets,pointers,stylesandsoon.Apointthatmustbenotedisthattoomanyindents/pointersmake
the content complicated to understand.
Need for Indentation
• Offers a well defined structure.
• Makes it readable and comprehensible.
• Increases the objectivity of the content.
V) Abbreviations/Acronyms/Symbols
Abbreviations,acronymsandsymbolsareusedinordertosavetimeandspaceMoreovertheirusecan
make your notes easier to read. Acronyms can be used both (whether you’re typing or writing by
hand),
Theshortenedformofawordiscalleditsabbreviation.Example:contd.(continued).Anacronymisa
standinforastringofwords.Unlikeabbreviations,theyarewordsconsistingofthefirstlettersofeach
wordin thename of something. Example: NASA(National Aeronautics and Space Administration)
Waystoabbreviatewords
Almostanywordcanbeshortenedduringnotemaking.Givenbelowaresomeideasabouthowtodo
this.
A) Usethebeginningsofwords.
Onewaytoshortenawordistouseonlythefirstfewlettersoftheword.Example:
x info  information
x max.–maximum
x stat.–statistics
x corp.–corporation
x pop.–popular
x int. – interest
x promo.–promotion
B) Usethebeginningsofwordswiththefinalletter.
Sometimes aword canbe abbreviatedby usingthefirstfewlettersoftheword andaddingthefinal
lettertoit.Anapostrophe(‘),maybeaddedintheplaceoftheomittedletters.Forexample:
x govt.orgov’tgovernment
x interl. or inter’l international

Chapter-5 : Note Making - 297 -

 x dept.ordep’t–department
x prodn.orprod’n–production
x intl. or int’l – international
C) Omitvowels
Abbreviationscanalsobeformedbyleavingoutthevowels.Itisstillpossibletounderstandtheword.
Example:
x prblm–problem
x schl school
x bckgrnd–background
x yrs–years
x vr–avour
x bsns – business
D) Usethefirstletterandthelastletterofaword.
Somewords,especiallythosewordsthathavejustonesyllable,canbeabbreviatedbywritingthefirst
andlastletteroftheword.
Example:
x mtmount
x qtquart
x glgirl
x Mr.–mister
E) Shortenthesuffixattheendoftheword.
Attimeswordscanbeabbreviatedbyshorteningthesuffixattheendoftheword.
x productn production
x consistn  consisting
x processg  processing
x implem n  implementation
x decrg  decreasing
x ckgchecking
CommonSymbolsandAcronyms
There are many common abbreviations, acronyms and symbols which can be used for notemaking.
You already are aware of many (especially the mathematical symbols). Try to start using them while
making notes.
ExamplesofSymbols
Symbol Meaning Symbol Meaning
o leadsto & And
m caused by % Percent

n Increase $ Money

p Decrease @ At
> greaterthan ` minutes/feet

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 < less than “ seconds/inches
Therefore B& Male
? Because @& Female
Examplesof5Acronyms
Acronym Acronym
CAO Chief Accounting Officer FIFO FirstIn,FirstOut
CEO Chief Executive Officer ROE Returnon Equity
CFO Chief Financial Officer COD Cash on Delivery
CIO Chief Information Officer USP Unique Selling Point
CMO Chief Marketing Officer HR Human Resources
COO Chief Operating Officer PR Public Relation
CPA Certified Public Accountant CC CopyTo
CTO Chief Technology Officer FIFO FirstIn,FirstOut
DOB DateofBirth AMA Against Medical Advice
SUV Sports Utility Vehicle OTC Over The Counter
Q.whataresomeSuggestedtipswhileusingAbbreviations/Acronyms/Symbols?
x Judicial and controlled use of abbreviations should be made.
x Whileusingselfmadeabbreviations,adheretoapatternsothatwhilegoingthroughthenotes,
onecanrecallwhattheabbreviationmeant.
x Accordingtoageneralrule,headingsshouldnotbeabbreviated.Subheadingsmay/maynothave
abbreviations.
x Avoidformingasentencewithonlyabbreviationsandsymbols.Itwouldnot becomprehensible
forothers.
x Includea key listing the abbreviations,symbolsand acronymsused.
Usefultip:Studentsareadvisedtousestandardacronymswhilemakingnotes.However,therecanbe
moreflexibilitywhileusingabbreviations.Thelistofabbreviationsusedshould belisteddownatthe
endofnotemaking as‘Key for reference’.
VI) Summarizingthenotes
Asummaryisashortenedorcondensedversionofalongeressayorreading.Itisnotaredraftofthe
originaltextandshouldnotbelong.Yourpurposewhilewritingthesummaryistogiveabasicideaof
theoriginaltext,whatitwasaboutandwhattheauthorwantedtocommunicate.Asummaryshould
not have a word limit exceeding 25 percent of the original text. Remember that a summary must
include all the points from the notes. Abbreviations must not be used while summarizing notes. To
writeasummary,youmustuseyourownwordstoexpressbrieflythemainideaandrelevantdetails.
Givenbelowisalistofpointstobekeptinmindwhilesummarizingnotes:
x Usethe informationgiven in the notes.
x Donotaddorsubtractanypieceofinformation.
x Donotmakeassumptions.
x Useshortandcrispsentencesasopposedtodetailedandlongonesoftheoriginalcontent.
x Avoid sounding repetitive; use new words to express the same information.

Chapter-5 : Note Making - 299 -

 x Trytocovermaximumpoints
x Reach a conclusionif required.
ExamplesofNoteMaking
TYPE1
Read the following passages and make suitable notes.
Mosttwinsarefraternal,whichmeanstheydevelopedfromtwoseparateeggswhichwerefertilizedat
thesametime.Suchtwinsarenomoresimilarinphysicalcharacteristicsthanareanyotherbrothersor
sisters. About one third of twins are identical, which means they developed from a single fertilized
egg,andusuallyshareacommonplacenta.Unlikefraternaltwins,theirgeneticmakeupisidentical,so
theyhaveverysimilarphysicalcharacteristics,andarealwaysthesamesex.
Twins
I. Fraternal twins
a) dvlpfrom2separateeggs
b) ferti’nofeggshappensat sametime
c) notsimilarinphy.chrctrstcs
II. Identical twins
a) developfrom1egg
b) sharecom.placenta
c) Similarinphy.chrctrstcs
Key:
1. dvlp – develop
2. ferti’n – fertilization
3. phy. – physical
4. chrctrstcscharacteristics
2. ItmaysoundtoofantastictobetruebutifyouareluckyenoughtogototheSaharaDesertoneday,
then you too will be able tosee thousands of engraved, decorated rocks! On these rocks, there are
scenes of animals, of agriculture, of sheepherding, and hunting; there are ceremonies and dances,
andchariotsdrawnbygallopinghorses,allpicturedontherocksasiftherewerepartofanillustrated
book—awonderful,stonebook,whichconjuresupimagesandjourneysofincrediblejourneys.Andif
wecouldmakeavoyagetothedawntime,wewouldndthattheSaharawasnotthenthedesertwe
now know, but a green and fertile region instead. Mighty rivers owed down and the vegetation was
Mediterraneanstyle:Pinetrees,Holmoaks,cedars,lime treesandashtrees.
SaharaDesert
I) Whatcanyousee?
a) engr’d rocks
b) scenes ofanimals,hunting, agri.
c) pic.ofdances,ceremoniesandchariotswithhorses
II) WhatwasSaharalikeininitialdays?
a) green and fertile
b) luxurious Mdtrnkindofveg.
c) riversowingdown

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 Key
1. engr’d – engraved
2. agri.–agriculture
3. pic.–pictures
4. MdtrnMediterranean
5. veg. – vegetation
TYPE2
Readthefollowingnotesandsummarizethemusingasfewwordsaspossible.
1) FunctioningoftheEar
i) Sndtravelsaswaves
ii) Ext.eargathersthewaves
iii) Wavesareledtoac
iv) Acinc.loudnessandmoveswavestoerdrm
A) partsoftheerdrm:threetinybones
a) hammer
b) anvil
c) stirrup
B) changeweak soundwavesinto powerful ones
v) Erdrmpassesthewavestocochlea
v) WavesreachtheCorti
vi) Hairlikereceptorsconvertsoundwavestoelec.impulses;passtothebrn
vii) Brnallowsustohearthesound
Key
1. snd. –sound
2. ext. – external
3. inc. increases
4. elec. – electrical
5. ac–auditorycanal
6. erdrm–eardrum
7. brn–brain
Summary
Soundtravelsintheformofwaveswhichtheexternalearsgather.Passingthroughtheauditorycanal
whichincreasestheloudness,thesewavesmovetotheeardrum.Thedierentpartsoftheeardrums
(hammer,anvilandstirrup)changetheweaksoundwavesintopowerfulones.Finally,thewavespass
throughthecochleatotheCorti,wheretheygetconvertedtoelectricalimpulses,andreachthebrain
whichthenallowsustohearthesound.
2) TheImportanceofStrategicPlanning
1. SP entails
1.1planofaction
1.2toolforlargeorg.&nations
1.3toolforind.
2. Imp.ofSPforpeople

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 2.1helpsbal.b/wpassivity&tryingtoliveacc.
2.2antithesis tosimplydrifting
2.3smartnessto embrace opportunities
3. Imp.ofSPinbusiness
3.1 provides knwldg about employees
3.2 max. short/long term investments
4. Fundamental steps in SP
4.1creatingaplan
4.2keepingtrackofrslts
4.3alteringcoursebasedonrslts
5. Howcanweplan forcomplexitiesinlife?
5.1pickareaoflifewhichismostchallenged
5.2startplanningforit
5.3whenthatareaisstabilized,dev.planforanotheraspect
5.4learntodev.skillsin makingtradeoffsb/wvariousaspectsoflife
Key
1. b/wbetween
2. ind.  individual
3. accaccording
4. dev.  develop
5. inv. – investment
6. rslts  results
7. SP–strategicplanning
8. max. – maximize
9. org.–organizations
SUMMARY
Strategicplanningreferstoaplanofaction.Itisanimportanttoolusedbylargeorganizations,industries,
nations and individual. It is important because it provides a balance between passivity and living
according to Plan. Strategic planning leads to smartness in embracing opportunities. Planning is
importantinbusinessbecauseyouneedtoknowtheindividualandyouneedtomaximizeshortterm
and longterm investments. The fundamental activities in planning include creating a plan, keeping
trackofresultsandalteringcoursebasedonresults.Onecanplanforacomplicatedlifebypickingup
anareaoflifethatismostchallengedandstartingtoplanforspecicareas.Whenoneareaisstabilized,
startontheother.
TYPE3
Read the following passages carefully and make notes on it, using headings, subheadings, etc. Use
recognizable abbreviations wherever necessary. Use a format you consider suitable. Supply an
appropriatetitletoit.Alsowriteasummary.
1) Ifyouarelookingforwaystoimproveyourwritingskillsthereisonesurefirewaytoaccomplish
this. Every time we sit down to write an article the intention should be to try and keep things
shortandsweet.Goodarticlesareshortarticlesthatgetapointacrosswiththeminimalamount
of words used.Alltoooftenhowever wefind ourselves going o ontangentsthereby increasing
thelengthofthearticle.Effectivewritingskillsincludetheabilitytowritelessandsaymorebut
withoutrepetition thisskill canbe hardto develop.
Herearewayswhichcanmakeyouabetterwriter.Whysaysomethingin100wordsthatcanbe
saidinjust50?Yourreaderswillgreatlyappreciatethis.Itisalwaysagoodideawhenwritingto

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 finishyourcompositionandthenletitsitforawhile.Withalittlethoughtandafreshperspective
youcanalwayseditoutwords,phrases,andevenparagraphsthatarenotneeded.Gettingyour
pointacrossusingasfewwordsaspossiblewillgivethosewordsyoudousemoreimpact.
Yourabilitytosticktothesubjectandgettothepointissomethingeveryreaderwillappreciate.
Acommontendencyformostwritersistosometimesdeviatefromthemainpointoftheirarticles.
Infactmeanderingawayfromyourintendedsubjectcanirritatereaderstothepointwherethey
don’t even finish reading what you wrote. The additional content does not necessarily add any
value tothe articleitselfandthereforecanandshouldbeleftoutwhen possible.
Learntowritesoeverybodyunderstandsyouanddon’ttrytoimpressthemwithyourvocabulary.
Theneedforadictionaryisnotwhatyourreadersarelookingforsincethistakesadditionaltime
and is inconvenient. Always write to and for the general audience and never assume that they
haveanappreciationforaverbosevocabulary.Thisonlymakestheirreadingallthemoredifficult
and less enjoyable.
The best way to improve your writing skills is through repetition. One of the most effective
writingtalentsapersoncandevelopistheabilitytowritelessandsaymore.Thisisparticularly
truewhenyou write an article since you wanttocapture thereaders’ attentionwithout boring
them.Asaruleofthumbgoodarticlesareshortarticles.
ImproveYourWritingSkills
I) Cnsldt your thoughts.
a) use few words
b) givethetopicsomethought
c) editunwantedwords,phrases,andevenparas
II) Sticktothesubj.
a) getrt.tothept.
b) donotdvt.fromthemainpt.
c) addncontentdoesn’tnecsrlyaddanyval.
d) dvtingfromthetopicirritatesreaders
III) Write plainly
a) write for the general public
b) ensure everybody undrstnds you
c) useeasy vocab
Key
1. cnsldt  consolidate
2. parasparagraphs
3. rt.right
4. pt.–point
5. sub.–subject
6. val.–value
7. addn – additional
8. vocab.–vocabulary
SUMMARY
Ifyouarelookingforwaystoimproveyourwritingskills,thenthereareafewthingsyoumustkeepin
mind.Thefirststep istosticktothesubject.Donotdivertfromthe topic.Gettingyourpoint across
usingasfewwordsaspossiblewillgivethosewordsyoudousemoreimpact.Additionalcontentdoes
notnecessarilyaddvaluetothearticleandmayirritatethereaders.Remembertowriteforthegeneral
public. Useeasyvocabulary toensure that everybodyunderstands you.Thefinalstep ofwriting your
articleistoletitsitforawhile.Giveitalittlethoughtandeditoutwords,phrases,andevenparagraphs
that aren’t needed.

Chapter-5 : Note Making - 303 -

 CLASSWORK

Q1 Read the following passages carefully and make notes on it, using headings, subheadings,
etc.Provideakeyfortheabbreviationsused.Useaformatyouconsidersuitable.Supplyan
appropriate title to it.
(1) Anythingprintedandboundinbooksizecanbecalledabook,butthequalityorminddistinguishes
thevalue ofit.
Whatisabook?ThisishowAnatoleFrancedescribesit:“Aseriesoflittleprintedsignsessentially
onlythat.Itisforthereadertosupplyhimselftheformsandcolorsandsentimentstowhichthese
signscorrespond.Itwilldependonhimwhetherthebookbedullorbrilliant,hotwithpassionor
coldasice.Orifyouprefertoputitotherwise,eachwordinabookisamagicfingerthatsetsa
fibreofourbrainvibratinglikeaharpstringandsoevokesanotefromthesoundingboardofour
soul. No matter how skilful, how inspired the artist’s hand, the sound it makesdepends on the
quality of the strings within ourselves.”
Until recently books were the preserve of a small sectionthe urban upper classes. Some, even
today,makeitapointtocallthemselvesintellectuals.Itwouldbeapityifbooksweremeantonly
forintellectualsandnotforhousewives,farmers,factoryworkers,artisansand, soon.
InIndiatherearefirstgenerationlearners,whoseparentsmighthavebeenilliterate.Thisposes
specialchallengestoourauthorsandtothosewhoareentrustedwiththetaskofdisseminating
knowledge. We need much more research in the use of language and the development of
techniques by which knowledge can betransferred to these people without transmission loss.
Publishers should initiate campaigns to persuade people that a good book makes a beautiful
presentandthatreadingagoodbookcanbethemostrelaxingaswellasabsorbingofpastimes.
Weshouldaimatbooksofqualitynolessthanatquantitativeexpansioninproductionandsale.
Unlessoneisconstantlyexposedtothebest,onecannotdevelopatasteforthegood.
(2) Smokerswilloftensaythattheyarenotaddictedtocigarettes.Thesepeoplethinkofsmokingas
ahabitwhichtheycancontrolandwouldbeabletostopatanytime.While,itistruethatsome
peoplecanstopsmokingatwill(almostmostcannot),itmustberecognizedthatsmokingisinfact
an addiction, much like an addiction to alcohol, heroin or cocaine. Furthermore, smoking is
addictivebecausenicotine,asubstancethatwhengiventomonkeys,rats,dogsandevensquirrels
will precipitate chemical dependency in them. Cigarette addiction is the result of a complex
interactionbetweenthesmoker(host),nicotineandtheenvironment.Forthehost,factorssuch
as personality, educational level and social setting are important. Smokers tend to associate
certainsituationsormoodswithsmoking.Theseassociationsbecomecuesthatreinforcepatterns
of smoking. Having a cigarette with coffee, after dinner orwhile stressing out over a job are a
commonhabitamongsmokersandthesebecomeassociationsthatprovokecravingforcigarettes.
Q2 Read the following notes and summarize appropriately.
1) Headache and their Treatments
A) Classin
(i) tnsnh’ach
(ii) mgrneh’ach

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 B. Symptoms
(i) tnsnh’ach
(a) feelingtight band around head
(b) paininneck andshoulders(ii)mgrneh’ach
(a)painononesideofthehead
(b)  vomiting and irritability
(c)brightsportofashesoflight
C. Causes:
(i)tnsnh’ach
(a)longstretchesofdriving
(b)longhrs.oftypingorsittingonthedesk(ii)mgrneh’ach.
(a)chocolate,coee,smoking.
(b)MSUiscertainfooditems
D. Treatment :
(i) self–caretechniquesforshorterpd.
(ii) doctoradvice for permanent treatments.
Key
(1) Classifin = Classification (4) mgrne = migraine
(2) h’ache = headache (5) pd=period
(3) tnsn=tension
A) WhatisGW?
i) causesofGW
a) humaninu.
b) carbonpoln
c) burning of forests
ii) eectsofGW
a) rise in temp.
b) severedisasterslikeheatwave,oodsanddroughts
c) epidemics and advent of various diseases
d) higherdeathrate:oraandfaunaboth
e) acidic oceans
B) HowtopreventGW
i) atthepersonallvl
a) reduce, reuse, recycle
b) uselessofac
c) useenergyecientproducts
d) plant moretrees

Chapter-5 : Note Making - 305 -

 e) use CNG vehicles
ii) at the industry level
a) recycle industrial waste
b) install taller chimneys in industries
c) campaigns against deforestationat thegovt.level
d) digitization of bills, accounts, writings, avoid use of paper
e) stop forest fires
Key
(1) GW=GlobalWarming (4) Temp = Temperature
(2) influ = Influence (5) Lvl=Lerul
(3) Poln = pollution (6) ac=airconditions
Q3 Read thefollowing passagescarefully and makenoteson it,using headings,sub headings,
etc. Use abbreviations wherever necessary. Use a format you consider suitable. Supply an
appropriatetitletoit.Alsowriteasummary.
1) Thecoeeplant,anevergreenshruborsmalltreeofAfricanorigin,beginstoproducefruit3or4
yearsafterbeingplanted.Thefruitishandgatheredwhenitisfullyripeandareddishpurplein
colour.Theripenedfruitsofthecoeeshrubsareprocessedwheretheyareproducedtoseparate
thecoeeseedsfromtheircoveringandfromthepulp.Twodifferenttechniquesareinuse:awet
processandadryprocess.
Firstthe freshfruitispulpedbyapulpingmachine.Somepulpstillclingstothecoee,however,
andthisresidueisremovedbyfermentationintanks.Thefewremainingtracesofpulparethen
removedbywashing.Thecoffeeseedsarethendriedtoamoisturecontentofabout12percent
eitherbyexposuretothesunorbyhotairdriers.Ifdriedinthesun,theymustbeturnedbyhand
severaltimesadayforevendrying.
Inthedryprocessthefruitsareimmediatelyplacedtodryeitherinthesunorinhotairdriers.
Considerablymoretimeandequipmentisneededfordryingthaninthewetprocess.Whenthe
fruitshavebeendriedtoawatercontentofabout12percenttheseedsaremechanicallyfreed
from their coverings.
The characteristicaroma and taste of coffee only appear later and are developed by the high
temperatures to which they are subjected during the course of the process known as roasting.
Temperatures are raised progressivelyto about 220230°C. This releases steam, carbon dioxide,
carbonmonoxideandothervolatilesfromthebeans,resultinginalossofweightofbetween14
and23percent.Internalpressureofgasexpandsthevolumeofthecoffeeseedsfrom30to100
per cent. The seeds become rich brown in colour; their texture becomes porous and crumbly
under pressure. But the most important phenomenon of roasting is the appearance of the
characteristicaroma of coffee,which arises from verycomplex chemicaltransformations within
the beans. The coffee, on leaving the industrial roasters, is rapidly cooled in a vat where it is
stirred and subjectedto cold air propelledby a blower. Good quality coffeesare thensorted by
electronic sorters to eliminate the seeds that roasted badly. The presence of seeds which are
eithertoolight ortoodarkdepreciatesthequality.

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 2) Swimmingpoolswereonceconsideredaluxurylimitedonlytotherich.Today,thankstoplastics
andplenty,theynumberinthemillions.Few,ofcourseareofOlympicsizewhereaswimmercan
quicklydohislapsandstayinshape.Mostareaboveground,roundminipools,lineforacooloff
and a’frolic.But,health experts havecome torealize thatexercisescreatedespeciallyforsuch
swimmingpoolscantonethemuscles,strengthentheheartandpacifythespiritofpeopleofall
agesandconditions.Andtheseexercisesaren’trestrictedtosmallpoolsalone.Anytypeofpool,
including a crowded municipal one, will do.
DesigneroftheprincipalpopularexercisesisC.CarsonConrad,executivedirectoroftheCalifornia
Bureau of Health. Physicians approve of Conrad’s exercises for three reasons.
First, since water pressure, even on a nonmoving body, stimulates the heart to pump blood
throughout the body, exercise in the water promotes thorough circulation still more effectively.
Second, water exercise is rhythmic. And continuous, rhythmic exercises, authorities agree, are
oneofthebestdefensesagainstcirculatoryailmentswhichmightcauseathersclerosis,oftenthe
precursorofcoronaryattacksandstrokes.
Third, water exercise can be enjoyed with benefit by both young and old, healthy andin firm,
swimmers,andinshallowwater,nonswimmers.Dr.IraH.WilsonandFredW.Kasch,aphysician
andphysiologist team, assert that even persons with paraplegia, rheumatic heart, asthma,
emphysema,victimsofpolioorstrokes,oramputationcanexerciseinwaterandenjoyweightless
movement. Arthritics move easily under water. Some physicians use hydrocalisthenics for their
cardiac patients.
At the University of Illinois Prof. Richard H. Pohndori studied the e ect of water exercise on a
“typical” couple. He chose as subjects a manandwife team of physicians, 43 and 41 years old
respectively,whohadbeensedentaryforyears.Hisprogramwassimple:“Swimfromoneendof
thepooltotheotheruntilyoucanswim1000yardsaday.Swimeverydayfortenweeks.”Before
theystarted,thecoupletook151physicaltests.Attheendoftenweeks,theyweretestedagain:
theirpulseratehaddropped,theirrateofbreathinghaddropped,theirbloodpressurehadcome
downtonormal,thecholesterollevelintheirbloodhaddropped20percent.Further,morethan
half of the broken blood vessels disfiguring the woman’s thighs had vanished, her husband had
improvedinallhisphysicalfitnesstests;hereducedthesizeofhisheart,makingitmoreefficient.
Both felt younger, more vigorous.

Chapter-5 : Note Making - 307 -

 HOME WORK1

PASSAGE 1
Read thepassagecarefullyandanswerthequestionsgivenbelow.
Occasionalselfmedicationhasalwaysbeenpartofnormalliving.Themakingandsellingofdrugshas
alonghistoryandiscloselylinked,likemedicalpracticeitself,withbeliefinmagic.Onlyduringthelast
hundredyears orso,asthedevelopmentofscientifictechniquesmadeitpossiblediagnosishasbecome
possible. Thedoctor is now able to followupthe correct diagnosis of manyillnesseswith specific
treatmentof theircauses.Inmanyotherillnessesof whichthecausesremainunknown,he isstill
limited,liketheunqualifiedprescriber,tothetreatmentofsymptoms.Thedoctoristrainedtodecide
whentotreatsymptomsonlyandwhentoattackthecause.Thisistheessentialdifferencebetween
medicalprescribingandselfmedication.
Theadvanceoftechnologyhasbroughtaboutmuchprogressinsomefieldsofmedicine,includingthe
developmentofscientificdrugtherapy.Inmanycountriespublichealthorganizationisimprovingand
people’snutritionalstandardshaverisen.Parallelwithsuchbeneficialtrendsaretwowhichhavean
adverseeffect.Oneistheuseofhighpressureadvertisingbythepharmaceuticalindustrywhichhas
tendedtoinfluencebothpatientsanddoctorsandhasledtotheoveruseofdrugsgenerally.Theother
isemergenceofeating,insufficientsleep,excessivesmokinganddrinking.Peoplewithdisordersarising
fromfaultyhabitssuchasthese,aswellaswellfromunhappyhumanrelationships,oftenresortto
self–medicationandsoaddthetakingofpharmaceuticalstothelist.Advertisersgotogreatlengthsto
catchthismarket.
Cleveradvertising,aimedatchronicsufferswhowilltryanythingbecausedoctorshavenotbeenable
tocurethem,caninducesuchfaithinapreparation,particularlyifsteeplypriced,thatitwillproduce
bysuggestionaveryrealeffectinsomepeople.Advertisementsarealsoaimedatpeoplesuffering
frommildcomplaintssuchassimplecoldandcoughswhichclearupbythemselveswithinashorttime.
Thesearethemainreasons,whylaxatives,indigestionremedies,painkillers,coughmixtures,tonics,
vitaminandirontablets,nosedrops,ointmentsandmanyotherpreparationsarefoundinquantityin
manyhouseholds.Itisdoubtfulwhethertakingthesethingseverimprovesaperson’shealth,itmay
evenmakeitworse.Worse,becausethepreparationmaycontainunsuitableingredients;worsebecause
thetakermaybecomedependentonthem;worsebecausetheymightbetakenexcess;worsebecause
theymaycausepoisoning,andworstofallbecausesymptomsofsomeseriousunderlyingcausemay
beaskedandthereforemedicalhelpmaynotbesought.Selfdiagnosisisagreaterdangerthanself
medication.
Questions:
(A) On the basis of your reading of the above passage, make notes on it, in points only, using headings and
subheadings. Also use recognizable abbreviations, wherever necessary (Minimum four). Supply an
appropriate title toit.
(B) Writeasummaryoftheabovepassageinabout80words.

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PASSAGE 2
Read thepassagecarefullyandanswerthequestionsgivenbelow.
Almostallofushavesufferedfromaheadacheatsometimeortheother.Forsomeaheadacheisa
constantcompanionandlifeisapainfulhellof wastedtime.
Themostimportantsteptocopewithheadachesistoidentifythetypeofheadacheoneissuffering
from.Intensionheadaches(twohandheadache),afeelingofatightbandaroundtheheadexitsalong
withthepainintheneckandshoulders.Itusuallyfollowsactivitiessuch aslongstretchesdriving,
typingorsittingonthedesks.Theyareusuallyshortlivedbutcanalsolastfordaysorweeks.
Aheadacheisusuallycausedduetothespinalmisalignmentofthehead,duetotheposture.Sleeping
onthestomachwiththeheadturntoonesideandbendingoverpositionsforalongtimemakeitworse.
Inmigraineheadaches,thepainsusuallyononesideoftheheadmaybeaccompaniedbynausea,
vomitingirritabilityandbright spotsof flashesoflight.Thisheadacheismeantworsebyactivities
especiallybending.Thethrobbingpainintheheadworsensbynoiseandlight.Certaintriggersfor
migrainesmaybechocolate,caffeine,smokingorMSUincertainfooditems.Thepainmaylasteightto
twentyfourhoursandtheremaybeahangoverfortwoorthreedays.Migrainesareoftenproducedby
an‘aura’changesinsightandsensation.Thereisusuallyafamilymigraine.
Inaheadache,painoriginatesfromthebrainbutfromtheirritatednervesofmuscles,bloodvessels
andbones.Theseheadpainsignalstothebrainwhichjudgesthedegreeofdistressandrelaysitat
appropriatesites.Thepainsometimesmaybereferredtosightsotherthantheproblemareas.Thisis
knownasreferredbypainandoccursduetosensationoverload.Thus,though,mostheadachestates
atthebaseoftheskullreferredpainasfelttypicallybehindtheeyes.
Factorscausingheadacheareunderstoodbutitisknownthatashiftinthelevelofbodyhormones
chemicals,certainfoodsanddrinksandenvironmentalstresscantriggerthem.
Iftheheadachetroublesyouoften,visitthedoctor,whowilltakeafullhealthhistoryrelatingtodiet,
lifestresses,thetypeofheadache,triggingfactorsandreliefmeasures.Youmaybeaskedtokeepa
‘headachediary’whichtellsyoutolist–thetimeheadachestartedandwhenitended,emotional
environmentalandfoodanddrinkingfactorswhichmaycontributetoit.Thetypeandseverityofpain
andthemedicationsusedwhichprovidemuchreliefarealsotobelisted.
Thishelpsthedoctorindeterminingtheexactcauseandtypeofheadacheandtheremedythereof.
Questions:
(a) Onthebasisofyourreadingthepassagemakenotesonitusingrecognizableabbreviationswherever
necessary.Usea format uconsider suitable. Supply asuitable title.
(b)Writeasummaryinabout80words.

Chapter-5 : Note Making - 309 -

 HOMEWORK2
Q1 Writesummary.
(1) ThedecisionoftheMinistryofEnvironmentandForeststorevalidatetheenvironmentalclearance
issued to South Korean steelmaker Posco for the proposed steel plant in Odisha is based on a
piecemealapproach,ratherthanacomprehensiveandcumulativeassessmentofallpartsofthe
project. It cannot claim to rely on sound judgment. What distinguishes the proposal from the
welterofprojectsbeforetheMinistryisitsmajorForeignDirectInvestmentpotential,estimated
atmorethan ` 50,000crore.Thereislittledoubtthatitwilltakemassiveinvestmentstopullthe
massesoutofdeeppoverty,andnewindustriesarevitaltoachievingthisgoal.Significantexpansion
oftheeconomyhastakenplaceoverthepasttwodecades,creatingmuchwealth.Unfortunately,
this has also coincided with grossly uneven distribution of negative externalities. In the case of
Posco, the acquisition of land has been a contentious issue, evoking strong protest from local
communities which remain unconvinced about the benefits. Evidently, neither the project
proponent nor the Odisha government has come up with persuasive arguments over the past
eight years on why villagers should part with their land when their livelihood is linked to it.
Moreover, there is no effort to reach  a consensus on the renewal of environmental clearance,
nowforaproductioncapacityofeightmilliontonnesperannum,evenwithconditionalitiesthat
include spending on ‘social commitments’ by Posco.
(2) Bymakingitoptionalforcinemahallstoplaythenationalanthembeforeeveryshow,theSupreme
Court has at last removed the  coercive element it had unfortunately introduced by an interim
orderinNovember2016.Layingdownajudicialrulethattheanthemmustbeplayedoncertain
occasionsinspecificplaces,intheabsenceofanystatutoryprovisiontothiseffect,wasunnecessary
and opened the court to charges of overreach. With the  Centre saying this directive could be
placedonhold,andthatitwouldsetupaninterministerialcommitteetorecommendregulations
for the presentation of the national anthem, the court has said it is not mandatory to play it in
cinemahalls.ThepanelwillalsosuggestchangesinthePreventionofInsultstoNationalHonour
Act,1971,orintheOrdersrelatingtotheanthemissuedfromtimetotime.
JusticeD.Y.Chandrachud,oneofthethreejudgesontheBench,hadatanearlierhearingdoubted
the wisdom of asking patrons of cinema to visibly demonstrate their patriotism each time they
entered atheatreto watchafilm, remarkingthatthere wasnoneed for an Indianto “wear his
patriotismonhissleeve”.Hehadaskedatwhatpointwouldsuch“moralpolicing”stopifitwere
to be prescribed that some kinds of apparel should not be worn at the movies as they could
amounttoshowingdisrespecttothenationalanthem.Thecourt’sorderalsohadsomeunintended,
butnotunforeseen,consequences.Theaudiencebeganlookingforsignsof‘disrespect’andthere
werereportsofvigilantism,withpeoplebeatenuporharanguedfornotstandingup.
Q2 Informationtechnologyclientsarenomoreinthe‘businessasusual’mode.And,‘lessismore’isthe
new mantra for IT spending. These two philosophies now rule the thinking of clients spending on
technology.TheITservicesindustryhasalsobeenfacingchallengesingettingretailandbankingclients
to spend on technology. Mr. Subramaniamdwells on these headwinds and new opportunities:
We can’t have teams that do only programming. We need more allrounders. People should have
functional knowledge, the ability to corelate and understand the experience being delivered to the
client. Coding is important. But you also have to ensure that we are coding for scale, that there are
vulnerabilitiesinyourcode;youshouldknowhowtotest,howtodocument.Morethananythingelse,
makesurethatyourcodedoesnotfreezeotherpiecesofcode.Inajigsawpuzzle,youcan’tworryonly
about your piece. Earlier, it was possible. Now you have to understand big picture; understand what
youaretryingtodeliverintermsofexperience.

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Q3 Thepotentialisenormous,andwehavenotliveduptoit.Yes,tradeismorethan$2billion,butmost
of that comes from trade in a few items like potash and phosphate and we would like to diversify.
Jordan could  be a market and would welcome investment from Indian companies, including in ICT,
infrastructureandenergy.HisMajestyislookingforwardtohisvisitinearly2018,assoonaspossible,
andwehopetocreatemomentumtoputusonafasttrackofties.
Youspokeofopportunities,butequallyJordanisinaregioninturmoil.Jordanitselfhousesmillionsof
refugeesfromPalestineandSyria.Howwillthischangein2018?
Forus,thecoreissueremainsthePalestinianIsraeliconflictandtherecannotbepeaceandstabilityin
theregionwithoutaresolutiontotheconflictonthebasisofatwostatesolutionthatwouldallowan
independent sovereignPalestinian state with Occupied (East) Jerusalem as its capital, onthe lines of
the1967situation,andthatwould allowapeacefulIsraelaswell. Wewant everycountry tosupport
this.Indiahasalwayshadaveryclearpositioninfavourofajust,lastingpeace,andweencourageIndia
tobemoreengagedandwouldliketoseemoreofanIndianrole[inthepeaceprocess.
Q4 Readthepassage:
(i) Makenotes,usingheadings,subheadingsandabbreviationswherevernecessary.(3Marks)
(ii) Write Summary. (2marks)
Agoodbusinessletterisonethatgetsresults.Thebestwaytogetresultsistodevelopaletterthatin
itsappearance,styleandcontent,conveysinformationefficiently.Toperformthisfunction,abusiness.
lettershouldbeconcise,clearandcourteous.Thebusinesslettermustbeconcise,don’twastewords.
Littleintroductionorpreliminarychatisnecessary.Gettothepoint,makethepoint,andleaveit.Itis
safetoassumethatyourletterisbeingreadbyaverybusypersonwithallkindsofpaperstodealwith.
Rereadandreviseyourmessageuntilthewordsandsentencesyouhaveusedareprecise.Thistakes
time, but is a necessary part of a good business letter. A short business letter that makes its point
quicklyhasmuchmoreimpactonareaderthanalongwinded,ramblingexerciseincreativewriting.
Thisdoesnotmeanthatthereisnoplaceforstyleandeven,onoccasion,humourinthebusinessletter.
While it conveys amessage inits contents,the letteralso providesthereaderwithan impression of
you,itsauthor,themediumispartofthemessage.Thebusinesslettermustbeclear.Youshouldhave
averyfirmideaofwhatyouwanttosay,andyoushouldletthereaderknowit.Usethestructureofthe
letter — the paragraphs, topic sentences, introduction and conclusion to guide the reader point by
point fromyourthesis,throughyourreasoning,toyourconclusion.Paragraphoften,tobreakupthe
page andtolend an air of organizationtotheletter.Use anaccepted business letterformat. Reread
whatyouhavewrittenfromthe point ofviewofsomeone whoisseeingit forthefirsttime, and be
surethatallexplanationsareadequate,all informationprovided(includingreferencenumbers,dates
andotheridentification).Aclearmessage,clearlydelivered,istheessenceofbusinesscommunication.
Thebusinesslettermustbecourteous.Sarcasmandinsultsareineffectiveandcanoftenworkagainst
you.Ifyouaresureyouareright,pointthatoutaspolitelyaspossible,explainwhyyouareright,and
outline what the reader is expected to do about it. Another form of courtesy is taking care in your
writing and typing of business letter. Grammatical and spelling errors (even if you call them typing
errors) tell a reader that you don’t think enough of him or can lower the reader’s opinion of your
personalityfasterthananythingyousay,nomatterhowidiotic.Thereareexcusesforignorance;there
are no excuses for sloppiness. The business letter is your custommade representative. It speaks for
youandisapermanentrecordofyourmessage.Itcanpaybigdividendsonthetimeyouinvestingiving
itaconcisemessage,aclearstructure,andacourteoustone.
[Sugg.Nov18]

Chapter-5 : Note Making - 311 -

Q5 Readthepassage:
(i) ‘Make Notes, using Headings, Sub headings and; abbreviations whenever necessary. (3Marks)
(ii) Write Summary. (2Marks)
In most sectors of the economy, it is the seller who attempts to attract a potential buyer with
various inducements of price, quality and utility and it is the buyer who makes the decision.
Wherecircumstances.permitthebuyernochoicebecausethereiseffectivelyonlyonesellerand
theproductisrelativelyessential,governmentusuallyasserts‘monopolyandplacestheindustry
underpriceandotherregulations.Neitheroftheseconditionsprevailsinmostofthehealthcare
industry.
In the healthcare industry, the doctorpatient relationship is the mirror image of the ordinary
relationship betweenproducerandconsumer.Onceanindividualhaschosentoseeaphysician
and even then there may be no real choiceit is the physician who usually makes all significant
purchasing^decisions:whetherthe patientshouldreturn“nextWednesday,”whether Xraysare
needed,whetherdrugsshouldbeprescribed,etc.Itisa rareandsophisticatedpatientwhowill
challengesuchprofessionaldecisionsorraisein advancequestions aboutprice,especiallywhen
theailment is regarded as serious.
Thisisparticularlysignificantinrelationtohospitalcare.Thephysicianmustcertifytheneedfor
hospitalization, determine what procedures will be performed and announce when the patient
maybedischarged.Thepatientmaybeconsultedaboutsomeofthesedecisions,butinthemain
itisthedoctor’sjudgmentsthatarefinal.Littlewonderthenthatintheeyesofthehospitalitis
the physician who is the real “consumer.” As a consequence, the medical staff represents the
“power centre” in hospital policy and decisionmaking, not the administration.
Although usually there are in this situation four identifiable participants—the physician, the
hospital,thepatient,andthepayer—thephysicianmakestheessentialdecisionsforallofthem.
The hospital becomes an extension of the physician; the payer generally meets most of the
bonafide, a bill generated by the physician/hospital; and for the most part the patient plays a
passive role. In routine or minor illnesses, or just plain worries, the patient’s options are, of
course, much greater with respect to use and price. In illnesses that are of some significance,
however, such choices tend to evaporate or away: DISAPPEAR “my despair evaporated J. F.
Wharton”,anditisfortheseillnessesthatthebulkofthehealthcaredollarisspent.Weestimate
thatabout7580percentofhealthcareexpendituresaredeterminedbyphysicians,notpatients.
For this reason, economy measures directed at patients or the general publics are relatively
ineffective. [Sugg.May19]
Q6 Readthepassage:
(i) Make Notes, using headings, sub headings, and abbreviations whenever necessary. (3Marks)
(ii) Write Summary. (2Marks)
(I)Anythingprintedandboundinabooksizecanbecalledabook,butthequalityorminddistinguishes
thevalue ofit.
Whatisabook?Thisis’howAnatoleFrancedescribesit:”Aseriesoflittleprintedsignsessentiallyonly
that.It is for the reader tosupplyhimself the forms and colors and sentiments towhich these signs
correspond.Itwilldependonhimwhetherthebookbedullorbrilliant,hotwithpassionorcoldasice.
Orifyouprefertoputitotherwiseeachwordinabookisamagicfingerthatsetsafibreofourbrain
vibratinglikeahardstringandsoevokesanotefromthesoundingboardofoursoulNomatterhow
skilful,howinspiredtheartist’shand,thesounditmakesdependsonthequalityofthestringswithin
ourselves”

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 Untilrecentlybookswerethepreserveofasmallsectiontheurbanupperclasses.Some,eventoday,
make it a point to call themselves intellectuals. It would be a pity if books were meant only for
intellectualsandnotforhousewives,farmers, factoryworkers,artisansand, soon.
In India there are first generation learners, whose parents might have been illiterate. This poses
special challenges to our authors and to those who are entrusted with the task of disseminating
knowledge.Weneedmuchmoreresearchintheuseoflanguageandthedevelopmentoftechniques
bywhichknowledgecanbetransferredtothesepeoplewithouttransmissionloss.Publishersshould
initiatecampaignstopersuadepeoplethatagoodbookmakesabeautifulpresentandthatreadinga
goodbookcanbethemostrelaxingaswellasabsorbingofpastimes.Weshouldaimatbooksofquality
nolessthanatquantitativeexpansioninproductionandsale.Unlessoneisconstantlyexposedtothe
best,onecannotdevelopatasteforthegood. [Sugg.May18]
Q7 ReadthePassage:
(i) Make Notes, using Headings, Subheadings and abbreviations whenever necessary. (3Marks)
(ii) Write summary (2Marks)
Peopledonotalwaysdo thethingswewantthemto.do.Nomatterhowreasonableorminimalour
expectations may be, therearetimeswhenweare letdown.Naturally,wefeelupset andhurtwhen
ourexpectationsarenotmet.Wedreadconfrontationsbecausetheyareunpleasantandcandamage
relationships.
Yet not confronting a person does not solve the problem because unresolved issues also affect
relationshipsinanadverseway.Actually,therealproblemliesinourstyleofconfrontation,notinthe
issue.
Typically,we usecharacterbased confrontations.Theyhelp inventing ourangerand hurt,but that is
theonlythingtheydo.Theyleadtoangryshowdownsandbringalldiscussionstoagrindinghalt.Itis
importanttorememberthatselfimage isthemostimportant possession of all humanbeings.
Itisthewayweviewandregardourselvesinourowneyesandintheeyesofothers.Asselfconscious
beings,weareactuallyawareofburimageandconstantlyworktowardsprotectingitfromanydamage.
Wealsoseekapprovalfromothersaboutourownselfimage.Wefeeldistraughtifwesensethatthere
isevenaslightthreattoourselfimage,becauseourcharacteristheessenceofourlives.Toensurea
rational dialogue over dashed expectations, we need to deploy issued based confrontations. They
involveanexplanationofwhichactionshavebotheredus,inwhatmannerandwhatchangeswewould
likefromthe otherperson. [Sugg.Nov19]
Q8 Readthe passage given below.
(i) Make notes, using headings, subheadings,and abbreviations wherever necessary. (3Marks)
(ii) Write summary. (2Marks)
The small village of Somnathpur contains an extraordinary temple, built around 1268 A.D. by the
HoyasalasofKarnataka–oneofthemostprolifictemplebuilders.BelurandHelebidareamongtheir
betterknown works. While these suffered during the invasion of the 14th century, the Somnathpur
temple stands more or less intact in nearoriginal condition. The small temple captivates with the
beauty and vitality of itsdetailed sculpture,coveringalmost every inch ofthewalls,pillarsand even
ceilings.It has three shikaras and stands on astarshaped raised platform with 24 edges. The outer
walls have a profusion of detailed carvings: the entire surface run over by carved plaques of stone.
TherewereverticalpanelscoveredbyexquisitefiguresofGodandGoddesses,withmanyincarnations
being depicted. There were nymphs too, some carrying an ear of maize, a symbol of plenty and
prosperity.The elaborateornamentation,verycharacteristic ofHoyasalasculptureswasaremarkable
feature.Oncloserlook–anditisworthit–theseriesoffriezesontheouterwallsrevealedintricately
carved caparisoned elephants, charging horsemen, stylized flowers, warriors, musicians, crocodiles
andswans.
Chapter-5 : Note Making - 313 -
 ThetemplewasactuallycommissionedbySomaDandanayakaorSomnath(henamedthevillageafter
himself),theministeroftheHoyasalaking,NarasimhatheThird.Thetemplewasbuilttohousethree
versions of Krishna – Venugopala, Janardana and Prasanna Keshava, though only two remain in their
originalform.Inthedarknessofthesanctumsanctorum,itsinterestingtodiscernthedifferentimages.
The temple’s sculptural perfection is amazing and includes the doors of the temple and the three
elegantly carved towers. [MTPApril19]
Q8 Readthe passage given below.
(i) Make notes, using headings, subheadings,and abbreviations wherever necessary. (3Marks)
(ii) Write summary. (2Marks)
(iii) Ataxisafinancialchargeorlevyimposedbyastateoritsfunctionalequivalentuponataxpayer
and the failure to pay such a levy is punishable by law. Taxes are imposed by a number of
administrativedivisions.Taxesaredirectorindirectinnatureandarerequiredto bereimbursed
inmoneyoritslabourequivalent.
Finances obtained through the imposition of taxation have been used by countries and their
functionalequivalentsconventionallytocarryoutanumberoffunctions.Someoftheseinclude
protection of property, expenditures on war, economic infrastructure, the enforcement of law
and public order, public works, subsidies, social engineering, and the very operation of the
government itself. Governments utilise taxes for the funding of welfare and public services.
These services include education systems, pensions for the elderly, health care systems,
unemployment rehabilitation and benefits, and public transportation. Energy, water and waste
management systems are also common public utilities. A portion of taxes is used alleviate the
state’sdebt and theinterestthis debtaccrues.
The important features of a modern economy are perceived by the efficient, fair and stable
financialmarketswhose contributionisvitaland significantfortheoverallfinancialsystem.The
mannersinwhichnationsraisetaxesareasvariedastheamountstheyraise.Thetaxpatternsof
a country areformulated on a number of factorsas its inherent economic structure, its history,
and to a significant extent on the taxstructures of its neighbouring countries. Choice plays an
important part, as different countries may attach different levels of importance to commonly
established characteristics of a superior tax system such as fairness, required economic effects
andcollectioncoststhatitentails.
Thelevelofthepercapitaincomeisapowerfuldeterminantofthenatureoftaxationacountry
willadopt,thehigherthelevelofthepercapitaincome,themoreacountryreliesondirecttaxes,
particularlythoseonpersonalincome.Consumptiontaxesalthoughtheyrisemoreslowlytendto
become relatively important in developed countries. These differentiations in tax structures
reflectthebasicdifferencesbetweenhighandlowincomecountries.Lowincomecountriesitis
observed tend to raise additional revenues at the border, as a few collection points require
control.Forthisreason,theyrelyheavilyonexcisetaxesontobacco,alcoholandsoon.Incontrast,
direct taxes (and VAT) require a more effective tax administration coupled with sophisticated
taxpayers, these conditions are prevalent in developed countries. [MTPMarch19]
Q9 Readthe passage given below.
(i) Make notes, using headings, subheadings,and abbreviations wherever necessary. (3Marks)
(ii) Write summary. (2Marks)

Masscommunication istheprocedureof exchanginginformation,particulars,facts, figures,and

data,etc.throughmassmediatoalargesectionofthepopulation.Insimplewordsconveyanceof
messages to several people at the same time is called mass communication. But by definition,
masscommunicationistheprocessthroughwhichsomeinformationiscirculatedbroadlyamong
people throughout the globe. Through mass communication, information can be transmitted
rapidlytomassthatgenerallystayfarawayfromtherootofinformation.Therearemanymediums,
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 such as radio, television, social networking (Facebook, Instagram, WhatsApp, Twitter, etc.),
billboards, newspapers, magazines, film, and internet for spreading information.
Characteristicsofmasscommunication:(i)Largenumberofaudienceand(ii)Widearea.Ithasa
large number of spectators of different races, groups, sections, cultures, communities, etc. and
theyaregeographicallyscatteredwhichmakesitmostpopularamongcommunicationsystemsas
peoplekeeptheireyesoneveryupdate.Theareaofmasscommunicationiswiderthananyother
communication systems.
The main motive of mass communication study is to learn how the substances of mass
communicationaffecttheattitudes,opinions,emotions,andultimatelybehavioursofthepeople
who collect or obtain the message. Studying involves exposing participants to various media
content and recording their reactions through data about the cause and effect of mass
communication.
The survey, which is another method, involves summarizing individuals’ responses to a set of
questions to generalize their reaction to a larger part of the world. Content analysis is another
processthat concludestheundilutedreaction onapiece ofcommunication, suchasnewspaper
article, book, televisionprogram,filmor broadcastnewsscript.
Aqualitativemethodisknownasethnographywhichpermitstheanalysttodipthemselvesinto
aculturetoobserveanddocumentthecalibreofcommunicationthatexiststhere.
It fosters mass products creating mass consumers which in turn increase sales of the product.
Peoplegetthelatestnewsinashorttimeirrespectiveoftheirlocationandatthesametime,it
educatespeoplegivinginformationabouthealth,theenvironmentandmuchmore.Hiddentalents
getchancestoshowcasethemselvesinthefieldsuchascomedy,acting,andsinging.Knowledge
increasesaswatchingquizprograms,animalprogramsandsoonincreasesthegeneralknowledge
ofthepeople.Usingmasscommunicationsensiblyandaccuratelyleadstothedevelopmentofa
country. [MTPOct19]
Q10 Read the passage given below.
(i) Make notes , using headings, subheadings, and abbreviations wherever necessary. (3Marks)
(ii) Write summary. (2Marks)
Warmingcausedbygreenhousegasemissionsisnotlinear:itappearstohavelapsedintheearly
21st century, a phenomenon known as a global warming hiatus. A new method for predicting
meantemperatures,however,suggeststhatthenextfewyearswilllikelybehotterthanexpected.
The system, developed by researchers at CNRS, the University of Southampton and the Royal
NetherlandsMeteorologicalInstitute, does not use traditional simulation techniques.Instead, it
appliesastatisticalmethodtosearch20thand21stcenturyclimatesimulationsmadeusingseveral
referencemodelstofind‘analogues’ofcurrentclimateconditionsanddeducefuturepossibilities.
Theprecisionandreliabilityofthisprobabilisticsystemprovedtobeatleastequivalenttocurrent
methods,particularlyforthepurposeofsimulatingtheglobalwarminghiatusofthebeginningof
this century.
The new method predicts that mean air temperature may be abnormally high in 20182022 —
higherthanfiguresinferredfromanthropogenicglobalwarmingalone.Inparticular,thisisdueto
a low probabilityof intense cold events.The phenomenon is even more salient with respect to
sea surface temperatures, due to a high probability of heat events, which, in the presence of
certainconditions,cancauseanincreaseintropicalstormactivity.Oncethealgorithmis‘learned’
(aprocesswhichtakesafewminutes),predictionsareobtainedinafewhundredthsofasecond
onalaptop.Incomparison,supercomputersrequireaweekusingtraditionalsimulationmethods.
[MTPAug18]

Chapter-5 : Note Making - 315 -

Q11 Readthefollowingpassage/newsstoryandmakepropernotesfollowingtheguidelinesofNotemaking.
(Source: internet/newspaper article)
Money is the centre of every economic transaction and plays a significant role in all economies. It
referstoassets which are commonly usedand acceptedas ameansofpayments oras amedium or
exchangeoroftransferringpurchasingpower.Forpolicypurposes,moneymaybedefinedasthesetof
liquid financial assets, the variation in the stock of which will have impact on aggregate economic
activity. Money has generalised purchasing power and is generally acceptable in settlement of all
transactionsandindischargeofotherkindsofbusinessobligationsincludingfuturepayments.Anything
thatwouldactasamediumofexchangeisnotnecessarilymoney.Forexample,abillofexchangemay
also be a medium of exchange, but it is not money since it is not generally accepted as a means of
payment. Money is totally liquid asset as it can be used directly, instantly, conveniently and without
any costs or restrictions to make payments. At the fundamental level, money provides us with a
convenientmeanstoaccessgoodsandservices.
As we know, money performs many functions in an economy. As such as, money is a convenient
mediumofexchangeoritisaninstrumentthatfacilitateseasyexchangeofgoodsandservices.Money,
though not having any inherent power to directly satisfy human wants, by acting as a medium of
exchange,itcommandspurchasingpoweranditspossessionenablesustopurchasegoodsandservices
to satisfy our wants. It is an explicitly defined unit of value or unit of account because money is a
‘commonmeasureofvalue’or‘commondominatorofvalue’ormoneyfunctionsasanumeraire.We
know,RupeeistheunitofaccountinIndiainwhichtheentiremoneyisdominated.Themonetaryunit
is the unitof measurement in terms of which the value of all goods and services is measured and
expressed.Moneyservesasaunitofstandardofdeferredofpaymenti.e.,moneyfacilitatesrecording
of deferred promises to pay. Money is the unit in terms of which future payments are contracted or
stated.However,variationsinthepurchasingpowerofmoneyduetoinflationordeflation,reducethe
efficacy ofmoney in this function.
So, we can say, money also functions as a permanent store of value. There are many other assets
government bonds, despite of other securities, land, houses, etc. which also store value. Despite
having the advantages of potential income yield and appreciation in value over time, these other
assetsaresubjecttolimitationssuchasstoragecosts,lackofliquidityandpossibilityofdepreciationin
value.Theeffectivenessofanassetasastoreofvaluedependsonthedegreeandcertaintywithwhich
theassetmaintainsitsvalueovertime.Hence,inordertoserveasapermanentstoreofvalueinthe
economy, the purchasing power or the value of money should either remain stable or should
monotonically rise over time.
Or
Themeaningofthetermultraviresissimply“beyond(their)powers.”Thelegalphrase“ultravires”is
applicable only to acts done in excess of the legal powers of the doers. The presupposes that the
powers in their nature are limited.
ItisafundamentalruleofaCompanyLawthattheobjectsofacompanyasstatedinitsmemorandum
canbedepartedfromonlytotheextentpermittedbytheact,thusfarandnofurther.Inconsequence,
any act done, or a contract made by the company which travels beyond the powers not only of the
directorsbutalsoofthecompanyiswhollyvoidandinoperativeinlawandisthereforenotbindingon
thecompany.Onthisaccount,acompanycanberestrainedfromemployingitsfundforpurposesother
than those sanctioned bythe memorandum. Likewise, it can be restrained from carrying on a trade
differentfromtheoneitisauthorizedtocarryon.

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 The impact of the doctrine of ultra vires is that a company can neither be sued on an ultra vires
transaction, nor can it sue on it. Since the memorandum is a “public document”, it is open to public
inspection.Therefore, whenone deals witha companyone isdeemed to know aboutthe powers of
thecompany.Ifinspiteofthisyouenterintoatransactionwhichisultraviresthecompany,youcannot
enforce itagainst the company.

Ifyouhavesuppliedgoodsorperformedserviceonsuchacontractorlentmoney,youcannotobtain
paymentorrecoverthemoneyrent.Butifthemoneyadvancedtothecompanyhasnotbeenexpended,
thelendermaystopthe companyfrompartingwith it bymeansofan injunction;thisisbecausethe
company doesnot become the owner ofthe money,which is ultra vires thecompany. As the lender
remainstheowner,hecantakebackthepropertyinspecie.Iftheultraviresloanhasbeenutilisedin
meetinglawful debt ofthecompany, thenthelendersteps intotheshoesofthedebtorpaid offand
consequently hewouldbe entitledtorecoverhisloan tothatextent from thecompany.

An act which is ultra vires the company being void, cannot be ratified by the shareholders of the
company.Sometimes,actwhichisultravirescanberegularisedbyratifyingitsubsequently.Forinstance,
iftheactisultraviresthepowerofthedirectors,theshareholderscanratifyit;ifitisviresthearticles
ofthecompany,thecompanycanalterthearticles;iftheactiswithinthepowerofthecompanybutis
done irregularly, shareholder can validate it. [RTPMay20]

00

Chapter-5 : Note Making - 317 -

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Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-320-
 CHAPTER6
INTRODUCTIONTOBASICSOFWRITING

INTRODUCTION

Languagehasfour basiccomponents
I. Listening
II. Speaking
III. Reading and
IV. Writing
 Achildfirst listenstoconversationsaround him/herand
 Then repeats the sounds and words which have been learnt from the environment.  Thus, the
nextstepislearningtospeak.
 Thereafter,thechildbeginsto recognize alphabetsandwordsandstarts toread.
 Thelastskilltobemasteredisthatofwriting.
Beginningfromwritingalphabets,thenwords,movingontosentences,paragraphsandfinallyproducing
completewrittencompositionsontheirown,theprocesstakesmanyyearsfortheindividualtomaster.
The reason is that, writing is a complex activity that requires vast vocabulary, knowledge of varied
sentencestructures and corrects grammatical usage. Presenting content in a logical and sequential
mannerisanotheressential aspectofwriting.
Multipleareasofbrainareusedincreatingtext,organizingwordsandsentencessequentiallysothat
theymakesensetothereader.
Q1 Whyshouldwritingskillbehonedanddeveloped?
I. It is an important medium of communication, used to express ideas, opinions and exchange
information.
II. Itisessentialtocontentdevelopment andcomposinganykindoftext.
iii. Officialand personalrecordsare maintained inthe writtenform.
iii. CreativeWritingbringstousvaluablefictionandnonfictionworkinformofnovels,shortstories
etc.
iv. Itisthesourceofearningalivelihoodformanypeople.
v. Writingdownideashelps inbringingclaritytothethoughtprocess.
vi. Itisameansofsavinginformationforlaterreference.

Chapter-6 : Introduction to Basics of Writing - 321 -

 vii. Writing also creates a permanent documentation, available for ready reference anytime (text
books, financial statements, minutes of meetings etc.).
viii. Knowledge creation and propagation happens largely through carefully documented research
procedures and theiroutcomes.
ix. Itisthemostusedformofofficialcommunication.
x. Moreandmorecompaniesarelookingforpeoplewithgood communicationskills.
Q2 Explainthestepsinwriting.
1. Selectingatopic:Thewritingprocessstartsbyselectingatopicforwriting.Anyonecanselectthe
topic for writing. The selection maybe made by a teacher, a manager or by the writer himself/
herself. Thefirststepistohaveanidea,theme,issueor anysubjectmatterclearlystated.
2. Brainstorming:Steptwoistobrainstorm.Onceyouknowthetopicyouhavetowriteon,random
thoughts, ideas, information related to it, begin to crowd your mind. You may also search for
contentrelatedtothetopic.Notedownallthepointsthatcomeup.
3. Organizingyourcontent:Theframeworkonwhichthewrittenworkstandsiscontent.Firstmake
alistofthemainsubpointsyouwishtoinclude.Thereafter,putallthesubjectmatterthatcanbe
includedinthat point, underthesubheading.Next,decidethesequenceororderofthepoints.
Creatingadiagramoroutlinehelpsyouorganizeyourideasappropriately.Somegraphicexamples
are as follows:
i. Raydiagram: writethe maintopic inthe circleand relatedcharacteristics/ featuresat the
end of the lines.

ii. Sequentialform:Listthesequenceinwhichyouwanttopresentthecontent

(1) ......................

(2) ......................

(3) ......................

(4) ......................

(5) ......................

iii. Comparison and Contrast:  We can also list the similarities and dissimilarities/ advantages
and disadvantages in different columns.
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 Alike Different
--------- ---------
--------- ---------
-------- ---------
-------- ---------
-------- ---------
iv. Problemandsolution:Statetheproblem/problemsandtherecommendationstosolveit/
them.

Problem ........... Solution

v. Cause and effect:Statecause of situationanditsvariouseffectsseparately.

Diagrammaticpresentationsbringagreatdealofclarityinorganizationofcontent.
4. Writing:The mostimportantstepis writing.Thechoiceofwords,aninterestingbeginning,framing
of suitable sentences, division of paragraphs, inclusion of anecdotes and dialogues and use of
illustrationsandexamples,decidewhetheryourwrittencontentmakesanimpactonyourreaders.
Thisisatimeconsumingandlaborioustask.Wehavetowrite,deleteandrewritebeforethefinal
productis ready.
5. Revising: Giving oneself a break before revising the text is a good idea. This gives us a fresh
perspectiveandanenhancedabilitytonoticeerrors.Atthisstagewecanaddordeletecontent,
reorganizematterandimproveuponcertainsectionsofourwork.
6. Editingandproofreading:Oncethetextisready,itistimetoproofreaditforspelling,grammar,
punctuation,andsentencestructureerrors.Thiscanbedonebyanexpertinthefield.7.Publishing
andprinting: Once thefinal document is ready, itcanbe sentfor printing, putona websitefor
readersorbeusedasaresourcedocument.

Chapter-6 : Introduction to Basics of Writing - 323 -

Q3 Explainvariousstylesofwriting:
Every writer has his/herownstyleof writing.Itdependsontheauthor’s mood,tone,perspective,
personalityandobjectivesofwritingaparticularpiece.However,therearefourmaintypesofwriting:
1.Expository
2.    Persuasive/Argumentative,
3.Descriptive
4.Narrative
1. Expository : It is a writing that aims to explain, illuminate or ‹expose› (which is where the word
‹expository›comesfrom).Themainpurposeofthistypeofwritingistospreadinformation.Thisstyle
of writing attempts to convey facts for a purpose. It is objective in nature. The writer’s opinions,
emotions,biases,orpointsofviewhavenoplaceinit.Thistypeof writingincludes
 Textbooks,
 Researchpapers
 Newsstories
 Encyclopedias
 Instructionmanuals
 Recipes/anyprocessdescription
 Essays
 Reports
2. Persuasive/Argumentative:Thegoalofpersuasivewritingistoconvinceandinfluenceareaderofa
certain idea or position on an issue. The writer persuades the reader to accept his point of view
throughargumentssupported byreasoningandfacts.Persuasivewritingiscommonin
 Editorials
 Speeches
 Businessidea
 Complaints
 Criticalanalysis
 Reviews(books,films,events)
 Advertisements
3. Descriptive:Thistechniqueinvolvesdescriptionofaparticularaction,object,person,place,event,or
sense.Theexpositoryanddescriptivewritingbothinvolvedescribingwhatisbeingwrittenabout,but
a description is more detailed, personal and subjective. It is dramatic, uses figures of speech and
allows the reader to sense, see, and feel everything that a particular phenomenon evoked in the
writer.
To distinguish between an expository and descriptive explanation, the reader has to assess whether
thewritingismore subjectiveor
objective.  Expository writing is impartial and based on facts, whereas descriptive writing is a more
personalized account by the author. Descriptive writing truly attempts to fascinate the reader.

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 Thedescriptivetypeofwritingiscommonto
 Poetry
 Diaries
 Partsoflargerstories
 Novels
 Travelogues
4. Narrative:Thenarrativestyleinvolvesstorytellingornarratingatale,completewithcharacters,actions,
dialogue,plot and setting. It is usually fictional, but can be nonfictional as well if it depicts real life
events and stories. Narrative writing is mostly personal and imaginative. It is original and self
expressive. Writers attempt to relate universal truths through poetry andtelling stories.
Techniquesusedinnarrativewritinginclude:
 Develop interesting, wellfleshed out and rounded characters.
 The plot of the story/novel/narrative should be well developed.
 The setting has to be vivid and vibrant. The reader should be transported to place/ era while
reading about it.
 Thethemeofthenarrationmustbeclearlyidentifiable.Donottrytoconveytoomanymessages
inonenarration.Themainthrustislostintoomanythemesandsubthemes.
 State yourpoint of viewlucidly.
 Include dialogues to break monotony of narration, to define characters and build interest of
reader.
 Incorporating anecdotes, especially in oral narration is an effective device in building curiosity
and holding attention of hearers/ readers.
 Usingmetaphorsandsimiles addstobeautyof language.
 Figuresofspeechputinthesugarandspiceinthestoryline.
 Imaginativelanguageandcoiningyourwordgroups/figuresofspeechisthecreativelicenseof
the writer.
 Addingemotionalappealisasignificantpartofwritingwhichoftenleadstocatharsisforreaders.
 Detailedandelaboratedescriptioncreatesamentalimageofthesetting/character/placeforthe
reader.
Itisoften foundin
 Novels
 Screen scripts
 Plays
 Stories
 Legends
 Poems
 Autobiographies/ biographies
 Memoirs
 Songs
 Personal essays

Chapter-6 : Introduction to Basics of Writing - 325 -

Q4 ExplainthesignificanceofwritingforStudents.
Writingisanessentialpartoftheeducation.Developinggoodwritingskillsistheimportantforacademic
success.
Why is effective writing important for students?
1. Improvescommunicationskills:Writingisatoolforexpressionandcommunication.Aneffective
writer is skillful and comfortable in expressing his/her thoughts and feelings.
2. Helps students review and remember recently learned material: It is an excellent way to
strengthen newly learnt material, recall key lesson points and build writing skills at the same
time.
3. Meansbywhicheducatorsassessstudentlearning:Writtenassignmentshelpteachersevaluate
thecomprehensionandprogressofthestudents.Theyaretheprimarytoolsforgradinglearners
4. Encourages creative expression and exploration: It helps students to develop creativity and
imagination,explorepossibilities,employproblemsolvingtechniques,andengageinstorytelling.
5. Essential for selfunderstanding: One of the best ways to understand anything is to write an
assignment or essay related to it. As you begin to search for relevant content and organize it
logically,theconceptbecomesclear.Creativewritinghelpstheauthorunderstandhis/herthoughts
and feelings.
6. Future Career prospects: Employers are increasingly complaining of the lack of adequate
communicationskillsamongstyoungsters.Possessinggoodcommunicationskillsisaprerequisite
inmanyjobs.Abilitytowritewellcanhelpyougetselectedforaparticularjobandishelpfulin
yourfuturecareergrowth.
Q5 ExplaincharacteristicsofGoodBusinessWriting.
Thefollowingcharacteristicsneedtobetakencareofinbusinesswriting.
1. CLEARPURPOSE:Peopleworkinginthebusinessesarebusywithhecticschedules.Theyhaveno
time to waste. Therefore while drafting any written piece, ensure that there absolute clarity
aboutyourpurposeforwriting.Anythingthatisambiguousorconfusingislikelytobethrownto
thetrashbin.Whatyouwriteshouldbeworthtakingoutthetimetoread.
2. CLARITY AND CONCISENESS: Poetic language and creative figures of speech are not be used in
businesscorrespondence.Theaiminbusinesswritingistheeffectivecommunicationofrequired
information. Therefore, clarity and briefness isof utmost importance.
3. TARGET AUDIENCE: The audience you are writing for determines your language and tone. The
mannerinwhichyoucommunicatewithaboss,acolleague,acustomeroraserviceproviderwill
decidethetone.Donotusephrasesandexpressionsthatcouldbemisunderstoodorareinsulting
Selectyourcontentandwordskeepinginmindwhatyourreaderneedsandwantstohear.
4. SUITABLETONE:Animportantaspectistoneofthewriter.Itcaneasilybemisinterpreted.Always
bepolite andcourteousinyour communication.Donotbeoverly informalorfriendly.
5. APPROPRIATE FORMAT: There are specified formats to write certain business contents. Letters,
proposals, memos and many other types of business writings follow the standard format as it
helpsavoidanykindofmisinterpretationorconfusion.Thereaderisabletoquicklyidentifythe
purposeofthedocument.Importanceofformatismoreimportantinbusinesswritingthanmost
other kinds of writing.
6. PERSONAL OPINIONS/ EMOTIONS: Business communication is based on facts and figures. The
writer’spersonalopinionorperspectiveonamatterdoesnotcarryanyweight.Hehastofollow
thecompanypolicyor directive.Avoid use of phrases like, ‘I think’,‘I feel’, ‘in my opinion’ etc.

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-326 -
 CLASSWORK
Q1 You are Ashish Batra, the Sales Manager of Vibhuti Agarbaties. You had a meeting with a client, Mr.
Ashok Goyal, regarding bulk supply of agarbaties to their company ‘Evergreen Traders’. Write a brief
summaryofthemeetingforyoursuperiorinabout125words.(Expositorystyle)
Hints:place,time,andpurposeofmeeting,whomyoumet,whatyoudiscussed,outcomeofmeeting,
furtherstepsthatneedtobetaken.
Q2 YouvisitedtheGoogleofficeinDelhiandwereimpressedbythebuildingandinfrastructure.Describe
the office in your own words, stating your perceptions and feelings. Word limit should be125.
(Descriptive Style).
Hints: location, huge building….ten floors, interior tastefully decorated, plush furnishings, well
ventilated and lighted, eco friendly, ample office space for every employee.
Q3 You wish to join journalism instead of engineering. Write a short paragraph (125 words) persuading
yourparentstoletyoujointhecourseofyourchoice.(Persuasivestyle)
Hints:Youunderstandtheconcernsandviewpointofparentsbuthavenointerestinengineering,have
an aptitude for writing well and are very keen on joining the journalism course, many good career
optionsavailableinjournalismthesedays,feelyoumaynotdowellinengineeringsincedidnotscore
highmarksinsciencesubjectsinschool,anyothervalidpointyouwanttoinclude.
Q4 Narrateashortanecdotefromyourlife,realorimaginary,inabout125150words.Addalltheelements
of storytelling. (Narrative style)
Hints:shouldhavecharacters,theme,andemotionalappeal.

HOME WORK
Q1 YouareAnantMathur,thebranchmanagerofareadymadegarment shopinAhmedabad.Youhada
meetingwithclient,Mr.AakashShahregardinglargesupplyofTshirtstohisshop‘Teenwares’.Write
abriefsummaryofthemeetinginabout125words.(ExpositoryStyle)
Hints:place,timeandpurposeofmeeting,thepersonyoumet,pointsofdiscussions,resultofmeeting,
stepsneedtobe taken.
Q2 You visited Mahatma Mandir at Gandhinagar and were impressed by theconcept of providing world
class facilities for international conferences. Describe the place in your own words, stating your
perceptionand feelings.(Word limit 125 words in Descriptive style)
Hints:Location,hugebuilding,conventionhallwithcapacityof6000people,2largeand1mediumsize
exhibitioncenters,7hitechConferenceHallsand4SeminarRooms,LargefoyerhousingATMs,Travel
Desk,FoodCourt,PhotoGalleryetc..
Q3 YouwishtobecomeacricketeralongwithyourstudiesofCA.Yourfatherdoesnotliketheidea.Write
aparagraphtoyourfatherin125wordsandpersuadehimtoallowyoutojointheteam.(Persuasive
style)
Hints: You respect his concern but find studies alone to be uninteresting and tough. Advantages of
sportsandgames,howitcanboostyouforstudiesalso,anyothervalidpointyouwanttomention.
Q4 Narratethedaywhenyouandyourfriendshadgonetothestadiumforwatchingacricketmatchforthe
firsttimeinabout125words.
Hints: characters,place, emotional appeal.
‰

Chapter-6 : Introduction to Basics of Writing - 327 -

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-328 -
Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-330-
 CHAPTER7
PRECISWRITING

INTRODUCTION
Ashorteningofatext,inone’sownwords,isknownaspréciswriting.ThetermisderivedfromtheFrench
wordprécismeaning‘precise’.Thus,aprécisgivesanaccurateandconcisedescriptionofthesubstance(or
the main idea) contained in the text without losing its meaning. In fact, it is an exact reproduction of the
logic, organization, and emphasis of the original text. Précis writing is a very useful exercise as it gives us
training incareful reading and develops our capacity to discriminate between the essential andthe non
essential.Since it insists on an economy of words, youlearntochoose yourwordscarefullyand construct
yoursentencesinaconcisemanner.

Q1 Explainthemeaningandcharacteristicsofpréciswriting.
Preciswritingmeansshorteningofatext,inone’sown words.
 Thetermisderivedfrom theFrench wordprécis meaning‘precise’.
 Aprécisgivesanaccurateandconcisedescriptionofthesubstance(orthemainidea)contained
in the text without losing its meaning.
 Itisanexactreproductionofthelogic,organizationandemphasisoftheoriginaltext.
 Préciswritingisaveryuseful exerciseasitgivesustrainingincareful readinganddevelopsour
capacity to discriminatebetween theessential and the nonessential.
 Sinceitinsistsonaneconomyofwords,welearntochooseourwordscarefullyandconstructour
sentencesin aconcisemanner.
Q2 ExplainthedifferencebetweenPrécisandSummary.
 Thefirstandthemostimportantdifferenceisthataprécis is a brief statement of a piece of writing
suchasareport,articleorachapterfromabook;whereasasummaryisa short account of longer
pieces of work suchasathesisoranovel.
 Secondly,theprécisfollowstheorderandproportionofthematerialintheoriginal,whereasthe
writerofthesummaryisfreetochangetheorderandproportionifhewishestodoso.
 Anotherimportantdifferencebetweenthetwo isthattheprécisstatesonlythethoughtofthe
originaltextwhereasthewriterofthesummaryisfreetointerpretthematerialandtocomment
onit.

Chapter-7 : Precis Writing - 331 -

Q3 ExplainthequalitiesofagoodPrécis.
1. Clarity:Itisessentialthattheideaspresentedintheprécisshouldbeclearandcomprehensible.By
usingsimple languageandstructures,thewritercanensurethatthereis noambiguity.
2. Objectiviy : The writermust havean objective approach.Heshould beabletowriteaprécis that is
unbiasedandpurelyasummaryoftheoriginaltext.
3. Correctness : Thewritermustensurethatnotjustthefacts,butalsothegrammarandsentencesare
withoutflaws.Sucherrorscanobscurethemeaningofthemessage.
4. Coherence : Agoodprécisshouldbecoherenti.e.theideasmustbepresentedinawaythatshowsthe
connections clearly.
5. Completeness : Thewritershouldincludealltheimportantfactsfromthetextintheprécis.Noimportant
factcanbeomittedtomakethesummaryshort.
6. Conciseness : Conciseness is a desirable quality of a good précis. A piece of writing is considered
conciseifitconveysthemessageinthefewestpossiblewords.Butthewritershouldnotomitessential
facts to achieve conciseness.
Q4 Explaintheprocedureofpréciswriting.
Step 1 : Read the passage carefullymorethanonceifsorequired.Thefirstrequirementofthewriter
istounderstandthetextwellenoughtoextractitscentral/mainidea.
Step 2 : Decide what facts or ideas in the text are essential andwhatareofsecondaryorofnoimportance.
Itisagoodideatounderlinetheimportanttermsandideas.
Step 3 : Select a suitable title fortheproposedprécis.
Step 4 : Collect all the key points and prepare a firstdraft of the précis, keeping in mind theneed to
reduce theoriginaltext to onethird itslength.
The main thoughts expressed in the passage, the ideas it contains, the opinions presented and the
conclusionarrivedatshouldbeapartoftheroughdraft.
Step 5 : Readthedraft.Itmaysohappenthatitistoolong.Shortenitfurther,ifnecessary,byomitting
anything which is not necessary to the central idea or by remodeling the sentences. Normally, you
shouldsucceedinproducingagoodprécisbytheseconddraft.
Step 6 : When you havemade your second (or final) draft,carefullyrevise your précisto ensurethat
youhavethebareminimumofwordsnecessarytoexpresstheideaofthepassage.Checktomakesure
thattheprécishasbeenwritteninwordsthatareyourownandnotthoseoftheauthor.
Q5 WhatPointsshouldberememberedwhilewritingaprécis?
 Aprecismustnotexceedonethirdofthelengthoftheoriginalpassage.
 Identify the central idea and omit unnecessary details.
 Eliminate wordy expressions from the précis.
 Avoid unnecessary repetition.
 Everyprécisshouldhaveashortandappropriatetitle.
 Itshould bewrittenin thewordsofthepréciswriter.
 Themainideasoftheoriginaltextshouldbepresentedinthesameorderintheprécis.
 Donotintroduceideasofyourownintheprécis.
 Donotcriticizeorchangetheauthor’sideas.
 Alwaysusethethirdperson,reportedspeechandpasttensewhilewritingaprécis.Onlyuniversal
truthsshould be written in thepresent tense.

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-332 -
Illustration:1
Alifeofactionanddangermoderatesthedreadofdeath.Itnotonlygivesusfortitudetobearpain,but
alsoteachesusateverysteptheprecarioustenureonwhichweholdourpresentbeing.Sedentaryand
studious men are the most apprehensive on this score. Dr. Johnson was an instance in point. A few
years seemed to him soon over, compared with those sweeping contemplations on time and infinity
withwhichhehadbeenusedtoposehimself.Inthestilllifeofamanofletterstherewasnoobvious
reasonforachange.Hemightsitinanarmchairandpouroutcupsofteatoalleternitywouldithad
beenpossibleforhimtodoso.Themostrationalcureafterallfortheinordinatefearofdeathistoset
a justvalue onlife.Ifwemerewishtocontinueonthescenetoindulgeourheadstronghumorand
tormentingpassions,we hadbetter begoneatonce;andifweonlycherishafondnessforexistence
accordingtothegoodwedesirefromit,thepangwefeelatpartingwhichitwillnotbeveryserver.
Step1:
Identify the main idea:Thetextdiscussespeople’sfearofdeath.Itdetailswhysomepeoplefeardeath
andhowthisfearcanbeovercome.
Step2:
Identify the main points/facts:
a) Wedonotfeardeathifweliveanactivelife.
b) Thosepeoplewhofeardeaththemostaretheoneswhospendmuchtimesittingandstudying.
c) Thishappensbecausetheyleadaninactiveandpeacefullifeanddonotwantanychange.
d) Themostsensiblewayofriddingoneselfofthefearofdeathisbyvaluinglife.
e) Weshouldbe comfortablewiththeknowledgethatlife isunpredictableandthat ourholdupon
life is very uncertain.
Step3:
Provide a suitable title: TheFearofDeath.
Step4:
Write the first draft:
Ifwe leadanactive lifefacingdangers, wewill fear death less.Peoplewhospenda lot of theirtime
lazing around and leadinga peaceful lifeare the oneswho aremost afraid of death. This is because
theydonotwantanychange.Themostsensiblewayofgettingridofthefearofdeathistovaluelife
properly.Ifwedonotgiveunnecessaryimportancetoourlife,wewillnotfeelthepangofdeath.

Step5:
Edityourwork.
Rememberthatthepréciscannotbemorethanathirdofthelengthoftheoriginaltext.Sincethegiven
passage is approximately 200 words, the précis cannot exceed 65 words. However the  first draft
consistsof80words.Thereforeitneedstobeedited.Example:
‘People who spend a lot of their time lazing around and leading a peaceful life are the ones who are most
afraid of death. This is because they do not want any change.’ canberewrittenmoresuccinctlyinthe
following manner:
‘People, who lead a lazy and peaceful life, are the most afraid of death.’
Step6:

Chapter-7 : Precis Writing - 333 -

 Writethefinaldraft.
Précis
TheFearofDeath
Ifwe leadanactivelife facingdangers, wewill feardeath less.People, who leadalazy andpeaceful
life,fearchangeandaremostafraidofdeath.Themostsensiblewayofgettingridofthefearofdeath
istovaluelifeproperly.Ifwedonotgiveunnecessaryimportancetoourlife,wewillnotfeelthepang
of death.
Illustration2
SentenceCorrectionisprobablytheeasiestsubsectionwithintheVerbalsectionoftheGMATforyou
toimprove.Doingwellonthissectionisreallyafunctionofknowingyourgrammarrulesverywelland
thenpracticingthemadnauseumwithhighqualitypracticeproblems.Spendsometimefiguringout
what the best materials are, study those materials, and then go back and study the materials a few
moretimestomakesureyouhavethegrammarrulesdowncold.Itisimportanttodothisbecauseyou
will want to get these questions done quickly so you can save time for the more timeconsuming
Critical Reasoning and Reading Comprehension sections.
Thereareafewgoodbooksouttheretolearnthefundamentalsofsentencecorrection,butIusedthe
Manhattan GMAT Sentence Correction Guide. I have also looked through the Aristotle Sentence
Correctionbookandcansaythatisofveryhighqualityaswell.TheManhattanGMATbookwasreally
great and wasveryclearandconciseindescribing all thegrammar rules Ineeded tolearn.My main
complaintaboutitisthatitdoesn’thaveverymanypracticeproblems.FromwhatIcantell,thisbook
seems to bethestandardbookthat people suggestwhen talkingabout thissectionof thetestandI
don’tdisagree.Incaseyouarewondering,youdon’tactuallyhavetolearnthatmanygrammarrulesfor
theGMAT.Thenumberofrulesyouhavetolearnpalesincomparisontothetopicsyoumustknowfor
the math section of the test. However,the questions on the GMAT are very tricky,so you should go
throughtheManhattanGMATbook56timesandevenmakeflashcardstomakesureyouhaveevery
ruleabsolutelydowncold.Ifyoudo,thenyoushouldbeabletofocusonthemeaningofeachsentence,
which isusuallywhat isrequiredforthe harderquestions onthe test.For practiceproblems,Ireally
justusedtheOfficialGuideandtheOfficialGuideVerbalSupplement.Thosewerereallygreatresources
for practice problems.
Iwouldalsorecommendmemorizingidiomsforthetest.Asofthelastfewmonths,idiomsarelessof
a focus on the test, but knowing idioms down cold is an easy way to get an extra question or two
correct. You also don’t really need to spend that much time memorizing them, so why wouldn’t you
wanttodoit?
AsImentionedbefore,thereareinstancesonmoredifficultproblemswhereyouneed toassessthe
meaningofthesentenceandwhatitistryingtoconvey.Keepthisinmindandtrynottoobsessover
verydetailedgrammarrules.Whenindoubt,gowiththeanswerchoicethatseemstohavethemost
logicalmeaningovertheonethatappearstofollowsomeminutegrammarrulethebest.Ifthemeaning
oftheoriginalsentenceischangedinoneoftheanswerchoices,itisdefinitelyawronganswerchoice.
If you follow this advice, I guarantee that you will do well on the sentence correction section of the
GMAT.
(Source: Free Articles from ArticlesFactory.com)
Précis
GMATSentenceCorrectionHowtoGetBetter
TheSentenceCorrectionoftheGMATisverydoable.Knowingyourgrammarrulesandpracticingthem
willensuresuccess.Identifythebest studymaterial;study themafewtimestoensureyouhavethe

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-334 -
 rules on your fingertips.
Some reference books that you could use to learn the fundamentals of sentence correction are
Manhattan GMAT Sentence Correction Guide and Aristotle Sentence Correction book. You don’t actually
havetolearnthatmanygrammarrulesforthe GMAT.However,thequestions on the GMATarevery
tricky,soyoushouldmakesureyouhaveeveryruleabsolutelydowncold.
Thereareinstancesonmoredifficultproblemswhereyouneedtoassessthemeaningofthesentence
andwhatitistryingtoconvey.Whenindoubt,gowiththeanswerchoicethatseemstohavethemost
logical meaning over the one that appears to follow some minute grammar rule the best. Also,
rememberthatthe answerisdefinitely incorrectif themeaningoftheoriginal sentenceischanged.
Illustration3:
India’stradedeficitwithChinaincreasedto$52.69billionin201516from$48.48billionintheprevious
financial year, Parliament was informed on Monday.
“DuringtheAprilSeptemberperiodof201617,thedecitisat$25.22billion,”CommerceandIndustry
MinisterNirmalaSitharamansaidinawrittenreplytotheLokSabha.
“IncreasingtradedeficitwithChinacanbeattributedprimarilytothefactthatChineseexportstoIndia
relystronglyon manufactureditemsto meetthedemandof fastexpandingsectorslike telecomand
power,” she said.
IndiaisnegotiatingtheRegionalComprehensiveEconomicPartnership(RCEP)tradeagreementkeeping
inview“itsoffensiveexportinterests”aswellassensitivitieswithrespecttoallparticipatingcountries
including China, she said. She added that e orts are being made to increase overall exports by
diversifying the trade basket with emphasis on manufactured goods, services, resolution of market
access issues and other nontariffbarriers.

Précis
India’sincreasingtradedeficitwithChina(Source:TheHindu)
AccordingtoCommerceandIndustryMinisterNirmalaSitharaman,India’stradedecitwithChinahas
risenby$4.21billion,sincethelastfiscalyear,reachingafigureof$52.69billion.Shecontributesthis
to the imports made by the telecom and power sector. To bridge this gap, e orts are being made to
enhance the overall exports by diversifying the market emphasizing on various services and
manufactured goods.
Illustration4:
India’snewminingbill hasprovisions whichseek,rightly,toshovelmoney fromminingcompaniesto
ruralpeopleaffectedbymining,butthedevilcouldlieinthedetail.Theproposalhasthreedefects—
One,itseeksdifferentialtreatmentforcoalandotherminerals—coalminerswouldshare26%oftheir
prots,whileminersofothermineralswouldgiveadditionalroyaltypayments.Two,itexemptscaptive
minersfromthisobligationtosharemineralwealth.Andthree,itleavesoutthekeyvariable,theprice
oftheore,manipulatingwhichcompaniescanarbitrarilyunderstatetheirprotsandpayapittanceas
royalty, as they indeed havebeen. The sensiblething is tolink royalty to the globally traded price of
the mineral in question and assign a share of reasonable royalty to the local community. Unify the
sharingparameterasashareoftheroyallylinkedtogloballytradedprices,foreverymineral.
AscoalminingisdonemostlybystateownedgiantCoalIndia,itwillhavetopaymost.Currentroyalty
rates,revisedeverythreeyears,arepatheticallylow.Minersroutinelyunderstatepricesatwhichthey
sell mineralsto de ate the value ofroyalties. Someof India’slargest minersare actually power, steel
andothermetals makers thatsquat on largecaptivemines.(Archives:newspaper)

Chapter-7 : Precis Writing - 335 -

 Précis
LoopholesinNewMiningBill
India’s new mining bill that diverts funds from mining companies to rural people affected by mining
hasnumerousloopholes.Itseeksdifferentialtreatmentforcoalandotherminerals.Itexemptscaptive
miners from this obligation to share mineral wealth. It disregards the price of the ore, manipulating
which companies can understate their profits. Instead, royalty can be linked to the globally traded
price of themineral andunifyingthe sharing parameterthus ensuring fairness.
Illustration5:
Indiahaswitnessedgreatexpansionofeducationalopportunitiessincetheattainmentofindependence.
However, the disabled children have not yet benefited inany substantial mannerfrom the growth in
educational facilities.Education ofhandicapped childrenis notconsideredimportantas itis believed
that such children ultimately become more dependent and non productive. It is therefore believed
thatscarcenationalresourcesshouldnotbewastedonthem.
Further, it has been our misconceived notion that the education of handicapped children requires
highly specialized people and as such, it must essentially be very costly. Maybe, precisely for these
wrong notions, we havenot been able to involve clinicaland educational specialization programmes
of training and education exclusively meant for handicapped children.
ItisencouragingtonotethatthenewNationalPolicyonEducationhasrecommendedtheplacement
ofsuchchildreninregularschoolssoastoprovidethemwithintegratededucationalongwithnormal
students. The integrated education will take care of the different needs of various categories and
types of disabled children. The objective is to place the disabled children in ordinary schools for
imparting education with the help of special teachers, aids and other resources. For fulfilling this
objectiveanarrayofthenecessaryinfrastructurebywayoftrainingofteachers,provisionofequipment
andbooketcaresomeofthebasicprerequisites.Hopefully,theparentsandtheirhandicappedchildren
willbegreatlyrelievedwhenthelatteraretransferredtoregularschools.
Précis
InclusiveEducationforChildrenwithDisabilities
DespiteexpansionofeducationalopportunitiesinIndia,thedisabled childrenhavenotyetbenefited
significantly.Duetothebeliefthathandicappedchildrenaredependentandnonproductiveandtheir
education requires highly specialized teachers, educational programmes for handicapped children
haveneverbeenimplemented.ThenewNationalPolicyonEducationrecommendsthatsuchchildren
beplaced inregular schoolswhere theirneedsarecateredto.However, tofulfill thisobjective,there
are prerequisites such as training of teachers, provision of equipment and book, etc. Hopefully, this
recommendation will bring relief to handicapped children.

Illustration6:
Interviews are the most common method used by employers to find candidates for jobs.  Many
candidatestaketheinterviewprocessveryseriously,whileothersdonot.Thereare5interviewmistakes
thatyoumustavoidifyouaretosecurethejobthatyouwant.
1.Beinglate
Apart fromamajoremergencywheneverything shutsdown,there reallyisnoexcuseforbeinglate.
Take thetime to plan yourjourney, estimatehow long it will take toget to the interviewvenue and
buildintimefordelays.Plantoarrive15minutesbeforeyourinterviewtimeandallow30minutesfor
delays.Itisbettertoarrive45minutesearlythan15minuteslate.

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-336 -
 2. Notknowingabouttheorganization
Aquestiontofindoutwhatyouknowabouttheorganizationisalmostguaranteed.Despitethismany
candidates are unable to demonstrate that they have even done basic research. With the power of the
internet and moregeneralfreedomof informationtherereally isno excuse.
3. Notknowingwhyyouwantthejob
Thisisanotherinterviewfavorite.Theinterviewerknowsthatyouneedtoearnmoneysomakesure
thisisnotyourresponse.Isitsomethingaboutthebusinessesreputation,thechallengesitfaces,the
segmentofthemarketitserves,styleofmanagementorprogressionprospects.Whateveritisbeclear
onwhyyouwantthejob.
4. Notknowingyourself
Aquestionaboutyourstrengthsandweaknesseswillcomeupinsomeformorother.Clearlyyoudon’t
wanttocomeupwithaweaknessthatwillblowawayyourchancesofgettingthejob,butatthesame
timeyouneedtodemonstrateselfawareness.Thinkof3strengthsand3developmentareasthatyou
will talk about in the interview.
5. Askingaboutsalary
Good interviewers will give you the opportunity to ask them questions. Poorly prepared candidates
willnotmakethemostofthisopportunity.Theywillask(beforetheyhavebeenofferedthejob)about
salary, benefits and holidays. The well prepared candidate will focus on questions about promotion
prospects,traininganddevelopment,thefuturedirectionofthecompanyandwhatitisliketoworkin
the organization.
Interviews are challenging for both the interviewer and candidates. By avoiding some of the most
commonmistakes,youcangreatlyincreaseyourchancesofsuccess.
Source:Free Articles from ArticlesFactory.com
Précis
InterviewMistakesthatMustbeAvoided
Since interviews arestill the most common methodof selecting candidates for jobs,there are some
mistakesthatyoumustavoidmakingduringaninterview:
1. Beinglate:Thereisnoexcuseforbeinglate,soplaninamannerthatyouarriveafewminutesearlier.
2. Not knowing about the organization:  Since it is certain that youwill be asked a question regarding
whatyouknowabouttheorganization,youmustdoabasicresearchbeforeyouarrivefortheinterview.
3. Notknowingwhyyouwantthejob:Yourinterviewerwouldwanttoknowwhyyouwantthejob.Have
somethingtotellthemapartfromthefactthatyouneedtoearnmoney’.
4. Notknowingyourself:Youneedtodemonstrateselfawareness.Thinkofstrengthsanddevelopment
areasthatyouwill talkabout intheinterview.
5. Asking about salary: When given a chance to ask questions, enquire about things like training and
development, instead of enquiring about salary and perks.

Chapter-7 : Precis Writing - 337 -

 CLASSWORK

Readthefollowingarticlesandwriteaprécisforeachofthefollowing.
Q1 India’snewminingbill hasprovisions whichseek,rightly,toshovelmoney fromminingcompaniesto
ruralpeopleaffectedbymining,butthedevilcouldlieinthedetail.Theproposalhasthreedefects—
One,itseeksdifferentialtreatmentforcoalandotherminerals—coalminerswouldshare26%oftheir
profits,whileminersofothermineralswouldgiveadditionalroyaltypayments.Two,itexemptscaptive
minersfromthisobligationtosharemineralwealth.Andthree,itleavesoutthekeyvariable,theprice
oftheore,manipulatingwhichcompaniescanarbitrarilyunderstatetheirprofitsandpayapittanceas
royalty, as they indeed havebeen. The sensiblething is tolink royalty to the globally traded price of
the mineral in question and assign a share of reasonable royalty to the local community. Unify the
sharingparameterasashareoftheroyallylinkedtogloballytradedprices,foreverymineral.
AscoalminingisdonemostlybystateownedgiantCoalIndia,itwillhavetopaymost.Currentroyalty
rates,revisedeverythreeyears,arepatheticallylow.Minersroutinelyunderstatepricesatwhichthey
sellminerals to deflatethevalue of royalties.SomeofIndia’slargestminersareactually power,steel
andothermetals makers thatsquat on largecaptivemines.(Archives:newspaper)
Q2 Indiahaswitnessedgreatexpansionofeducationalopportunitiessincetheattainmentofindependence.
However, the disabled children have not yet benefited inany substantial mannerfrom the growth in
educational facilities.Education ofhandicapped childrenis notconsideredimportantas itis believed
that such children ultimately become more dependent and non productive. It is therefore believed
thatscarcenationalresourcesshouldnotbewastedonthem.
Further, it has been our misconceived notion that the education of handicapped children requires
highly specialized people and as such, it must essentially be very costly. Maybe, precisely for these
wrong notions, we havenot been able to involve clinicaland educational specialization programmes
of training and education exclusively meant for handicapped children.
ItisencouragingtonotethatthenewNationalPolicyonEducationhasrecommendedtheplacement
ofsuchchildreninregularschoolssoastoprovidethemwithintegratededucationalongwithnormal
students. The integrated education will take care of the different needs of various categories and
types of disabled children. The objective is to place the disabled children in ordinary schools for
imparting education with the help of special teachers, aids and other resources. For fulfilling this
objectiveanarrayofthenecessaryinfrastructurebywayoftrainingofteachers,provisionofequipment
andbooketcaresomeofthebasicprerequisites.Hopefully,theparentsandtheirhandicappedchildren
willbegreatlyrelievedwhenthelatteraretransferredtoregularschools.
Interviewsarethemostcommonmethodusedbyemployerstofindcandidatesforjobs.Manycandidates
take the interview process very seriously, while others do not.
Q3 Thereare5interviewmistakesthatyoumustavoidifyouaretosecurethejobthatyouwant.
1. Beinglate
Apartfromamajoremergencywheneverythingshutsdown,therereallyisnoexcuseforbeinglate._
Take thetime to plan yourjourney, estimatehow long it will take toget to the interviewvenue and
buildintimefordelays.Plantoarrive15minutesbeforeyourinterviewtimeandallow30minutesfor
delays.Itisbettertoarrive45minutesearlythan15minuteslate.
2. Notknowingabouttheorganization
Aquestiontofindoutwhatyouknowabouttheorganizationisalmostguaranteed.Despitethismany
candidatesareunabletodemonstratethattheyhaveevendonebasicresearch.Withthepowerofthe

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-338 -
 internet and moregeneralfreedomof informationtherereally isno excuse.
3. Notknowingwhyyouwantthejob
Thisisanotherinterviewfavourite.Theinterviewerknowsthatyouneedtoearnmoneysomakesure
thisisnotyourresponse.Isitsomethingaboutthebusinessesreputation,thechallengesitfaces,the
segmentofthemarketitserves,styleofmanagementorprogressionprospects.Whateveritisbeclear
onwhyyouwantthejob.
4. Notknowingyourself
Aquestionaboutyourstrengthsandweaknesseswillcomeupinsomeformorother.Clearlyyoudon’t
wanttocomeupwithaweaknessthatwillblowawayyourchancesofgettingthejob,butatthesame
timeyouneedtodemonstrateselfawareness.Thinkof3strengthsand3developmentareasthatyou
will talk about in the interview.
5. Askingaboutsalary
Good interviewers will give you the opportunity to ask them questions. Poorly prepared candidates
willnotmakethemostofthisopportunity.Theywillask(beforetheyhavebeenofferedthejob)about
salary, benefits and holidays. The well prepared candidate will focus on questions about promotion
prospects,traininganddevelopment,thefuturedirectionofthecompanyandwhatitisliketoworkin
the organization.
Interviews are challenging for both the interviewer and candidates. By avoiding some of the most
commonmistakes,youcangreatlyincreaseyourchancesofsuccess.
Source: Free Articles from ArticlesFactory.com

HOME WORK1
Readthefollowingpassageandwriteaprecisforeachofthefollowing.
Q1 TherankingofIndiaasoneofthetop10wealthiestcountriesintheworldislargelybecauseofitslarge
population. India is the seventh wealthiest country in the world. It figures among the 10 wealthiest
countries,withatotalindividualwealthof$5,600billion.AccordingtoareportbyNew World Wealth,
Indiaisrankedseventh,aheadofCanada($4,700billion),Australia($4,500billion)andItaly($4,400
billion),whichcameinat8th,9thand10thslots,respectively.
TheU.Sisthewealthiestintheworld intermsoftotalindividualwealthheld($ 48,900billion)while
China stood second and Japan third, with total individual wealth of $ 17,400 billion and USD 15,100
billion, respectively.Others in the top 10 club include the United Kingdom (4) with a total individual
wealth of $ 9,200 billion, followed by Germany (5th, $ 9,100 billion) and France (6th, $ 6,600
billion).Wealth refers to net assets of a person. It includes all their assets (property, cash, equities,
business interests) less any liabilities, the report said adding that itexcludes government funds from
itsfigures.TherankingofIndiaasoneofthetop10wealthiestcountriesintheworldislargelybecause
of its large population. “Australia’s ranking is impressive, considering it only has 22 million people
living there,” the report explained.Over the past 5 years, China was the fastest growing wealthiest
country in terms of dollar wealthgrowth. On India, the report stated, “Australia and India also grew
stronglyandIndia,AustraliaandCanadahavejustovertakenItalyoverthepast12months.”Thestudy
rankedthewealthiestcountriesintheworldasofJune2016intermsoftotalindividualwealthheld.
Q2. Asaninvestor,youmaypaycloseattentiontothestockmarketsandfinditdifficulttounderstandwhy
marketsaresovolatile.Youmayaskmanyquestionslike“Willmarketsachieveanewhightomorrow
orhasthetimearrivedfordeepcorrection?”“Isthisagoodtimetoinvest?”Wedon’tknowwhatthe

Chapter-7 : Precis Writing - 339 -

 future holds. As a long term investor, it is important not to spend time dwelling on such questions
rather, remain invested in the longrun.
Markets act differently in short term and long term situations. You need to compare return on
investmentsovera10yearperformanceandnotforamonthorforayearbeforeyoudecidetoinvest
in equities.
In theshort term, markets are volatile;however, investorswhoholdlong term financial goals should
not worryabout volatility and should remain invested.
Benefitsofinvestingwithalongtermhorizon:
• Longterminvestmentscarryspecificfinancialgoalsandgiveoptionstoinvestorstoinvestsmall
amountsatregularintervalslikepermonthwhichhasapotentialtodeliverhealthyreturnsinthe
longterm.SIPisoneofthebestinvestmentvehicles.ClickheretoknowmoreaboutSIPinmutual
fund.
• Rate of returns are likely to fluctuate and remain volatile on short term investments however
longterm investmentsare comparativelylessvolatile andhold potential to givestable returns.
• Tax benefits are available for all long term investments including investments in mutual funds.
Investments in Mutual Funds  Investments in mutual funds are advisable for all types of investors
whetheryouhaveashorttermfinancialgoaloralongterminvestmentobjective.Broadlyequity,debt
and gold funds are available for investments and you can invest in those funds as per your financial
goal.
Benefitsofinvestinginmutualfunds
Professional investment management  The Mutual Fund industry is managed by professionals and
qualified investment fundmanagementteamswithinputsfromsolidresearch backedby experience.
Diversification  Another benefit is diversification. You can invest in equity funds, debt funds, gold
fundsasper yourpreference,income,age,risktakingabilityetc.
TransparentandregulatedindustryAboveall,themutualfundindustryisregulatedbytheSecurities
andExchangeBoardofIndia(SEBI)whichensuresasmoothandtransparentfunctioningofthemutual
fund industry.
Mutual funds area onestop shop for all your investment needs. Needs can range from wanting to
purchaseacarinthenextoneortwoyearstosavingforyourchild’sfutureandeducationinthenext10
years, savingup foryour retirement, orsavingtax on your regular income. Investorsideallylook for
diversification, low costs, ease and flexibility of withdrawal, better tax efficiency etc. Investors can
achievealltheirshorttermandlongtermfinancialgoalsthroughinvestmentsinMutualFunds.
Q3 WhatisWomenEmpowerment
Women empowerment in simple words can be understood as giving power to women to decide for
theirownlivesorinculcatingsuchabilitiesinthemsothattheycouldbeabletofindtheirrightfulplace
in the society.
According to the United Nations, women’s empowerment mainly has five components:
• Generating women’s sense of selfworth;
• Women’srighttohaveandtodeterminetheirchoices;
• Women’srighttohaveaccesstoequalopportunitiesandallkindsofresources;
• Women’srighttohavethepowertoregulateandcontroltheirownlives,withinandoutsidethe
home;and
• Women’sabilitytocontributeincreatingamorejustsocialandeconomicorder.
Thus,womenempowermentisnothingbutrecognitionofwomen’sbasichumanrightsandcreatingan
environmentwheretheyaretreatedasequalstomen.

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-340-
 WomenEmpowermentinIndia
HistoricalBackground:
From ancient to modern period, women’s conditionsocially, politically and economically has not
remainedsameanditkeptchangingwithtimes.InancientIndia,womenwerehavingequalstatuswith
men;inearlyVedicperiodtheywereveryeducatedandtherearereferencesofwomensagessuchas
Maitrayi in our ancient texts. But with the coming of famous treatise of Manu i.e. Manusmriti, the
statusofwomenwasrelegatedtoasubordinatepositiontomen.
All kinds of discriminatory practices started to take from such as child marriage, devadashi pratha,
nagarvadhusystem,satiprathaetc.Women’ssociopoliticalrightswerecurtailedandtheyweremade
fullydependentuponthemalemembersoffamily.Theirrighttoeducation,righttoworkandrightto
decide for themselves were taken away.
During medieval period the condition of women got worsened withthe advent of Muslim rulers in
India;asalsoduringtheBritishperiod.ButtheBritishrulealsobroughtwesternideasintothecountry.
AfewenlightenedIndianssuchasRajaRamMohunRoyinfluencedbythemodernconceptoffreedom,
liberty,equalityandjusticestartedtoquestiontheprevailingdiscriminatorypracticesagainstwomen.
Through his unrelenting efforts, the British were forced to abolish the illpractice of Sati. Similarly
severalothersocialreformerssuchasIshwarChandraVidyasagar,SwamiVivekananda,AcharyaVinoba
Bhave etc.worked fortheupliftment ofwomen in India.For instance,the Widow Remarriage Act of
1856wastheresultofIshwarChandraVidyasagar’smovementforimprovingtheconditionsofwidows.

HOME WORK2

Q1 Read the following passages and write aprécis for the same. Followthe basicrules of préciswriting
while writing.
TheGoodsandServicesTax(GST)isavastconceptthatsimplifiesthegianttaxstructurebysupporting
andenhancingtheeconomicgrowthofacountry.GSTisacomprehensivetaxlevyonmanufacturing,
saleandconsumptionofgoodsandservicesatanationallevel.TheGoodsandServicesTaxBillorGST
Bill, also referred to as The Constitution (One Hundred and TwentySecond Amendment) Bill, 2014,
initiatesaValueaddedTaxtobeimplementedonanationallevelinIndia.GSTwillbeanindirecttax
atallthestagesofproductiontobringaboutuniformityinthesystem.
OnbringingGSTintopractice,therewouldbeamalgamationofCentralandStatetaxesintoasingletax
payment.ItwouldalsoenhancethepositionofIndiainboth,domesticaswellasinternationalmarket
.Attheconsumerlevel,GSTwouldreducetheoveralltaxburden,whichiscurrentlyestimatedat25
30%.Underthissystem,theconsumerpaysthefinaltaxbutanefficientinputtaxcreditsystemensures
thatthereisnocascadingoftaxestaxontaxpaidoninputsthatgointomanufactureofgoods.
InordertoavoidthepaymentofmultipletaxessuchasexcisedutyandservicetaxatCentralleveland
VAT at the State level,  GST would unify these taxes and create a uniform market throughout the
country.IntegrationofvarioustaxesintoaGSTsystemwillbringaboutaneffectivecrossutilizationof
credits.Thecurrentsystemtaxesproduction,whereastheGSTwillaimtotaxconsumption.
Q2 Read the following passages and write aprécis for the same. Followthe basicrules of préciswriting
while writing.
Acodeofbusinessconduct,sometimescalledacodeofethics,isamanagementtoolforsettingoutan
organization'svalues,responsibilitiesandethicalobligations.Thecodeofconductprovidesemployees
with guidance for handling difficult ethical situations related to the business. Businesses develop

Chapter-7 : Precis Writing - 341 -

 theirowncodes,basedontheircorevalues,andnotwocodesarethesame.Tobetrulyeffective,the
codeofconductmustalsobeembeddedinthebusiness,soemployeesknowhowitappliestothem.
Q3 Read the following passages and write aprécis for the same. Followthe basicrules of préciswriting
while writing.
Virtual reality is an artificial environment that is created with software and presented to the user in
suchawaythattheusersuspendsbeliefandacceptsitasarealenvironment.Onacomputer,virtual
realityisprimarilyexperiencedthroughtwoofthefivesenses:sightandsound.Thesimplestformof
virtual reality is a 3Dimage that can be explored interactively at a personal computer, usually by
manipulatingkeysorthemousesothatthecontentoftheimagemovesinsomedirectionorzoomsin
or out. More sophisticated efforts involve such approaches as wraparound display screens, actual
roomsaugmentedwithwearablecomputers,andhapticsdevicesthatletyoufeelthedisplayimages.
Q4 Read the following passages and write aprécis for the same. Followthe basicrules of préciswriting
while writing.
A dualtransition—to aconsolidateddemocracyand anadvancedmarketeconomy—represents the
main challenge that the Korean political and economic system currently confronts. During the two
decades since it became a democracy, South Korea  has faced lingering problems, such as poor
governance, high level corruption, lack of leadership, political conflict, social polarization, volatile
publicopinion, andlackofconsensusonmajorissues.
Atthesametime,profoundleadershipchangeshavefundamentallychangedtheSouthKoreanpolitical
landscape. The new leadership has attempted to dismantle social, economic, and political structures
that were formed during the Cold War and to establish a more democratic and diplomatically
independent society. Such an approach has resulted in further social and political conflict, trials and
errors in policy, civic distrust, and a lingering leadership crisis.
Although Korean democracy is successfully consolidated, it is far from effective. There are profound
generational cleavages over various national issues, including economic and social policies, policies
toward North Korea and national defense, and attitudes towards the UnitedStates and China. Under
these circumstances, political institutions have been pushed aside, and civic organizations are
dominant.
Q5 Writeaprecisandgiveappropriatetitletothepassagegivenbelow:
Treesgiveshadeforthebenefitofothers,andwhiletheythemselvesstandinthesunandendurethe
scorchingheat,theyproducethefruitofwhichothersprofit.Thecharacterofgoodmenislikethatof
trees. What is the use of this perishable body if no use is made of it for the benefit of mankind?
Sandalwood,themoreitisrubbed,themorescentdiesityield.Sugarcane,themoreitispeeledand
cutupintopieces,themorejuice diesitproduce.Themenwhoare nobleatheartdonot losetheir
qualitieseven in losing their lives. What matters whether men praise them or not? What difference
does it make whether they die at this moment or whether lives are prolonged? Happen what may,
thosewhotreadintherightpathwillnotsetfootinanyother.Lifeitselfisunprofitabletoamanwho
doesnotliveforothers.Toliveforthemeresakeoflivingone’slifeistolivethelifeofdogs and crows.
Those who lay down their lives for the sake of others will assuredly dwell foreverinaworldofbliss.
[Sugg.Nov18,5Marks]
Q6 Writeaprecisandgiveappropriatetitle,tothepassagegivenbelow:
Indiahaswitnessedgreatexpansionofeducationalopportunitiessincetheattainmentofindependence.
However, the disabled children have not yet benefited inany substantial mannerfrom the growth in
educational facilities. Education of handicapped children, ultimately become more dependent and

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-342 -
 nonproductive.Itisthereforebelievedthatscarcenationalresourcesshouldriotbewastedonthem.
Further, it has been our misconceived notion that the education of handicapped children requires
highly specialized people and as such, it must essentially be very costly. Maybe, precisely for these
wrong notionswe have not been abletoinvolve clinical and educationalspecialization programmers
of training and education exclusively meant forhandicapped children. It isencouraging to note that
the new National Policy on Education has recommended the placement of such children in regular
schools so; as to provide them integrated education along with normal students. The integrated
education will take care of the different needs of various categories and types of disabled children.
The objective is to place the disabled children in ordinary schools for imparting education with the
helpofspecialteachers,aidsandotherresources.Forfulfillingthisobjectiveanarrayofthenecessary
infrastructure by way of training of teachers, provision of equipment and book etc. are some of the
basic prerequisition. Hopefully, the parents and their handicapped children will be greatly relieved
whenthelatteraretransferredtoregularschools. [Sugg.May19,5Marks]
Q7 Writeaprecisandgiveappropriatetitletothepassagegivenbelow:
Teachingisthenoblestofprofessions.Ateacherhasascareddutytoperform.Itisheonwhomrests
the responsibilityof moulding the character of young children. Apart from developingtheir intellect,
hecaninculcateinthemqualitiesofgoodcitizenship,remainingneatandclean,talkingdecentlyand
sittingproperly.Thesevirtuesarenoteasytobeimbibed.Onlyhewhohimselfleadsalifeofsimplicity,
purity and rigid discipline can successfully cultivate these habits in his pupils.
Besidesa teacher always remain young.He maygrow oldin age, but not in spite. Perpetual contact
withbuddingyouthskeepshimhappyandcheerfulThesearemomentswhendomesticworriesweigh
heavilyonhismind,butthedelightfulcompanyofinnocentchildrenmakeshimovercomehistransient
moods of despair. [Sugg.May18,5Marks]
Q8 WriteaPrecisandgiveappropriatetitletothepassagegivenbelow:
DNAdegradesquicklyafteran*animaldies,soresearchersoncebelieveditimpossibletofindancient
geneticmaterial.ThesearchforprimevalvestigesofDNAtookoffinthelate1980safterthedevelopment
ofatechniquecalledpolymerasechainreaction(PCR),whichcopiesminutequantitiesofDNA.Armed
with PCR, scientists could look for tiny fragments of DNA that might have weathered the millennia
unharmed.
Inrecentyears,researchershaveisolatedDNAfrom20millionyearoldmagnolialeavesandextracted
DNA from a 135millionyearold weevil found in amber. Recently, a team extracts DNA from bone
dating back millions of years for the first time. In the frenzied hunt for ancient DNA, microbiologist
ScottR.Woodwardmayhavebaggedthebiggestquarry.Drawingonlessonslearnedwhilegrowingup
among the fossilrich rocksof easternUtah, Woodward andhisteam became the firstpeople to find
genetic material belonging to a dinosaur.
Woodward,whosegrandfatherwasacoalminer,knewthatminesintheareaoftencontaineddinosaur
traces.AftersixmonthsoflookingWoodwardpulledtwobonefragmentsfromaCretaceoussiltstone
layerdirectlyatopacoalseam.Impededbyanunstablemineroof,Woodward’steamcouldnotrecover
any more bone samples. The siltstone apparently inhibited fossilization and preserved much of the
originalcellstructureinthebone.ResearchersisolatedstrandsofDNAfrombothfragmentsandused
PCRtocopyasegmentthatcodesforaproteincalledcytochromeb.Oncetheyhadmademanycopies,
they could determine the DNA sequence. Throughout their work, the biologists took precautions to
avoidcontaminatingthesampleswithmodernDNAorancientmaterialfoundwithinthecoal.According
toWoodward,circumstantialevidence,indicatesthatthebonefragmentsbelongtooneortwospecies
of dinosaurs. Dinosaur tracks are abundant in this coal formation, and the bones visible in the mine
werelargerthanthoseofacrocodilethebiggestnondinosaurknownintheserocks.
[Sugg.Nov19,5Marks]
Chapter-7 : Precis Writing - 343 -
Q9 Writeaprecisandgive appropriatetitle to the passagegivenbelow.
DigitalpaymentsinIndiatookoffinamassivewayrightafterdemonetization,withthelikesofPaytm,
Google pay leveraging the government move to become a household name. However, a new study
nowrevealsthatmorethanhalfoftheshopsinIndiancitieswanttostayawayfromdigitalpayments.
AwarenessisnotenoughtogetIndianstousedigitalpaymentsasonly48%ofmerchantsacceptdigital
payments,accordingtoareport donebyCUTSinternational.Expensiveandunreliableinfrastructure,
unawarecustomers,lackofinteroperability,transactionfailuresandchargesarereasonswhymerchants
don’t prefer digital payments in India.
CashisstillkinginIndiaanddigitalpaymentstodayholdamere10%ofalltransactionsinthecountry.
Recognising that, the Payments Council of India recently submitted recommendations to the newly
formedpanelbythegovernmentfordigitalpayments.ThePCIsuggestedseamlessaccesstopayments
infrastructure and formation of a KYC bureau among multiple other things. While right after
demonetization going cashless meant digital payments saw a huge spike in numbers, in 2018 the
conversation rate actually fell. According to data from the Reserve Bank of India, there was a one
percent fall in digital payments in November 2018 when compared to November 2017. Regulations,
too,formamajorroleintheadoptionofdigitalpaymentsinIndia.
While the current government has been encouraging of India’s shift to digitization and has been
promotingacashlessIndia,mandateslikecompulsoryKYChadhaltedtheoperationsofmanypayment
wallets. [MTPApril19,5Marks]
Q10 Writeaprécisandgive appropriatetitle to the passagegivenbelow.
After years of questioning the potential health hazards of second handcigarette smoke, a growing
number of scientists and health officials are becoming persuaded that thedangers are real, broader
thanonce believedand parallelthose of direct smoke.
Ithas long been established thatsmoking harmsthehealth ofthose who dothesmoking.Now new
epidemiological studies andreviews arestrengthening the evidence that it also harms the health of
otherpeoplenearbywhoinhalethetoxicfumesgeneratedbythesmoker,particularlyfromtheburning
endofthecigarette.Suchindirect,orsecondhand,smokingcausesdeathnotonlybylungcancer,but
evenmorebyheartattack,thestudiesshow.Thestudiesonpassivesmoking,asitisoftencalled,also
strengthen the link between parental smoking and respiratory damage in children.
Whathasswayedmanyscientistsisaremarkableconsistencyinfindingsfromdifferenttypesofstudies
inseveralcountrieswithimprovedmethodsoverthoseusedinthefirstsuchstudiesafewyearsago.
Thenewfindingsconfirmandadvancetwolandmarkreportsin1986fromtheSurgeonGeneral,who
concluded that passive smoking caused lung cancer, and from the National Research Council, which
said passive smoking is associated withlungcancer.
‘’The links between passive smoking and health problems are now as solid as any finding in
epidemiology,’’ said, an expert in the epidemiology of smoking at the University of California at San
Diego. [MTPMarch19,5Marks]
Q11 Writeaprécisandgive appropriatetitle to the passagegivenbelow.
UGCtargets30%enrolmentinhighereducationby2020.TheUniversityGrantsCommissionhasseta
targettoincreasetheGrossEnrolmentRatio(GER)inhighereducationto30percentby2020fromthe
present25.4percent,UGCChairmanDPSinghsaidonWednesday.TheUGChasalsosetcertainobjectives
toimprovethequalityofhighereducationininstitutions,hesaid.“Thenumberofstudentsenrolledin
highereducationsystemhasgoneuptoabout3.66crorein201718.TheGERroseto25.4percentin
201718,whiletheaimistoincreaseitto30percentby2020,”Singhtoldreportershere.GERistheratio
ofstudentsenrolledintheagegroupof1823yearstothepopulationinthatagegroup.Singhsaidthe

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-344 -
 UGC has also recently chalked out some objectives for improving the quality of learning in higher
educationinstitutions(HEIs).“Theobjectivesincluderegularrevisionofcurriculumwithclearlyspecified
learning outcomes and soft skills, enabling youth to secure access to employment/selfemployment,
developing socialindustry connect, availability of motivated teachers and accreditation to ensure
qualitative selfimprovement in HEIs,” he said.He also informed that the UGC and the Ministry of
HumanResourcesDevelopment(HRD)recentlyorganisedathreedaynationalconferenceinPuneto
discussresearchandinnovationinhighereducationandadopted10resolutions.Theseincludeachieving
theUGCqualitymandateinuniversitiesandaffiliatedinstitutionsby2020,adoptingandimplementing
learning outcomebased curriculum framework, enhancing research productivity and boosting
vocationalisationofhighereducationbyparticipatingintheNationalApprenticeshipPromotionScheme
(NAPS).Theexpertsattheconferencealsostressedontheneedtosensitisestudentsandencourage
themtoparticipateinsocial/economicbettermentofthecommunitybyadoptingatleastfivevillages
under the UnnatBharat Abhiyan, andto strive forsmart and clean campusby 2020,theofficialsaid.
Source: The Hindu (Business Line) [MTPOCT19,5Marks]
Q12 Writeaprecisandgive appropriatetitle to the passagegivenbelow.
Inalandmarkreform,India todayswitches toanewindirecttax system,theGoodsand ServicesTax.
TheGSTsubsumesthemultipleCentral,Stateandlocaltaxesandcessesleviedongoodsandservices,
unifying the country into a single market, thereby making it easier to do business and ensure tax
compliance. This will attract investors and more efficiently mop up revenues for the exchequer. The
reform has been years in the making, and having shown the political will to finally pull it off, the
CentralgovernmentmustworkwiththeStatestochartaroadmaptosimplifythetaxregime.Currently
therearemultipletaxratesrangingfrom0%to28%,plusacessonsomeproducts,creatingincentives
for lobbying and rentseeking. The level of preparedness for the new tax system too is not optimal,
withsectionsofindustry,tradeaswellasthebureaucracyvisiblyanxiousaboutseveralaspectsofthe
GST’soperationalandlegalframework.Inresponse,thedateforbusinessestofilethefirstGSTreturns
hasbeendeferred.ThegenerationofewaybillsformovinggoodsworthoverRs.50,000toohasbeen
put onhold, along with the requirement for ecommerce portals to deduct tax at source from small
sellers. [MTPAug19,5Marks]
Q13 Readthefollowingpassagesandwriteaprecisforthesame.
Amere14percentofthe58.3millionbusinessinoperationsinIndiawhentheSixthEconomicCensus
wascarriedoutin201314wereownedbywomen,acrossformalandinformalsectorsinbothruraland
urbanIndia.Thisisnotaflatteringstatistic.Asizablenumberofthe8.05millionwomenownedbusiness
over83percentdidnothaveanyhiredworkers;thecorrespondingnumberformaleownedbusiness
was about 70 per cent.Also,on average, womenrunbusinessesare smaller than thoserun by men.
However, there are many shining examples of women entrepreneurs who have not only set up
successfulventuresbuthavealsocarvedoutanicheforthemselves.KiranMazumdarShawisonesuch
women entrepreneur. There are also some who gave up very successful corporate careers to turn
entrepreneurs such as Falguni Nayar, a wellregarded investment banker who set up an ecommerce
ventureasshewasturning50yearsofage.TherearealsothelikesofRituDalmia,whobrokeoutof
conservative industrialist families, to venture into the world of gourmet food and fine dining with a
chainofrestaurants.Eachofthemistrailblazerandaninspirationforothers.Morerecently,thestart
up boom in India hasseen many young, professionally qualified women taking the plunge. Selfhelp
groupsandnonprofitfocusingonskilldevelopmentinruralareashavehelpedwomenentrepreneurs
bloom.SettingupabusinessisnoteasyinIndia.Itiseventougherforawoman.Awouldbewoman
entrepreneurhastoovercomesocioculturalbiases,whichrequireshertoprioritizehomeandfamily
aboveallelseandsacrificeherownaspirations.Accesstofinanceisthatmuchmoredifficult,whether
fromformalbankingchannelsorfromventurecapitalists.Managingamaleworkforceentrenchedina

Chapter-7 : Precis Writing - 345 -

 patriarchalsocietyposesitsownchallenges.Manymenarenotsupportiveofwomens’ambitionsand
evenattempttobreaktheirconfidence.Anotherproblemuniquetowomenistheirfailuretonetwork
withbusinessassociatesaseasilyasmen.Policyinterventionshavetendedtobesporadic,superficial
or poorly thought through, like the Centre’s failed experiment with a womenonly bank.
However, these issues are addressable. Mentoring of women entrepreneurs by specialist in various
fieldscanencouragewomenwhoaretentativeabouttakingthatfirststep. Networkingplatformsfor
women entrepreneurs can provide some support. Most of all, sociocultural changes need to be
engineered to encourage women to set up business ventures.
(Source: Business Line) [RTPMay20]
Q14 Severalspiritualphilosophiescontainthenotionofaninner‘thirdeye’,relatedtothepinealgland,to
whichisattributedsignificanceinmysticalawakeningorenlightenment,higherstatesofconsciousness
andextrasensoryperception(ESP).MentionofthisisfoundhistoricallyinancientCentralandEastAsia
andalsoincontemporarymetaphysicaltheoriesrelatingtoyoga.AneurologistinJaipurclaimstohave
found new evidence throwing light on interactions between a physical brain and a nonphysical
consciousness which leave an impact on human thought, emotion and behaviour. These psychic
phenomena are linked with the ‘third eye’, he says.Dr. Ashok Panagariya, recipient of the prestigious
B.C.RoyAward,saysthatthestudiesonthetwofunctionalunitsofbrainandconsciousnessandnew
understandingof psychicphenomena mayleadhumankindtotheabilitytoinduceESPatwill.Pineal
gland studies hold a great futuristic link between human and superhuman experiences.
Pinealgland,beingtheonlysingularstructureinthebrainandhavingastrategicpositionbetweenthe
twohalves,isbelieved toconnect betweenintellect andthe body.This‘third eye’couldbeactivated
to spiritual world frequencies, enabling a person to have the sense of all knowing, godlike euphoria
andonenessallaroundhim,saysDr.Panagariya.Oncetunedintoproperfrequencieswiththehelpof
meditation, yoga or various esoteric and occult methods, pineal gland can also enable a person to
travel into other dimensions, popularly known as astral travel, cosmological projection or remote
viewing. Dr. Panagariya, formerly the Principal of Sawai Man Singh Government Medical College in
Jaipur,haspointedoutthattherecentdevelopmentsinparapsychologyandneurosciencehaverevealed
newcluesaboutthewayESPandotherpsychicabilitiesareprocessedbythebrain.“Scienceisproviding
some answers about the structure or physiology of brain which makes parapsychological reception
possible.”
“The most astounding discovery of all is that the brain produces a parapsychology enhancing
neurotransmitter,”saysDr.Panagariyawhilereferringtoaclassofsubstancesknownasbetacarbolines
which are secreted from the pineal gland. He says this neurochemical is only produced at night and
breaksdowninto melatonin, another substancewhichhasbeen associatedwithpsychicexperiences.
Dr.Panagariya,presentlyamemberoftheRajasthanStatePlanningBoard,hasinhisstudyreferredto
another recent discovery of interest to psychic researchers proving that the human brain contains
magnetite (ferrous oxide), which renders the brain sensitive to the Earth’s magnetic fields.
“Ithaslongbeenknownthatbirdsandotheranimalsusemagnetiteintheirbrainstoaidinnavigation.
Magnetiteisespeciallyconcentratedinthepinealglandandthetemporallobes,”saysDr.Panagariya,
offering scientific explanation to the spiritual, mystical and paranormal experiences. (Source: The
Hindu) [RTPMay20]
00

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Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-348 -
 CHAPTER8
ARTICLEWRITING

INTRODUCTION
Anarticleisapieceofwritingmainlyintendedtobepublishedinanewspaper,magazineorjournal,andhas
awideaudience.Articlewritingistheprocessofcreatinganonctiontextabouttopicsthatcanvaryfrom
veryserioustotheordinary.Theycandiscussareassuchascurrentissuesortopicsofgeneralinterestsuch
ashealth,politics,entertainment,environmentalconcerns,etc.Sinceitiswrittenforawideaudience,itis
essentialthatthelanguageusedisinteresting,yetsimple,andincludesstories,anecdotesandfactstokeep
the readers engaged. The language used in an article can be formal or informal depending on the target
audience,butitmustbelessformalthanareport.

Q1 WhatisanArticle?Writethecharacteristicsofanarticle.
i. An article is a piece of writing mainly intended to be published in a newspaper, magazine or
journal,and hasawideaudience.
ii. Article writingis theprocess of creatinga nonfiction text about topics that can vary from very
serious totheordinary.
iii. Theycandiscussareassuchascurrentissuesortopicsofgeneralinterestsuchashealth,politics,
entertainment, environmental concerns, etc.
iv. Since it is written for a wide audience, it is essential that the language used is interesting, yet
simple,and includesstories,anecdotesandfactstokeepthereadersengaged.
v. Thelanguageusedinanarticlecanbeformalorinformaldependingonthetargetaudience,but
itmustbelessformalthanareport.
Q2 WhatistheusefulnessofanArticle?
Unlikeareport,anarticlecandomuchmorethansimplyreportaneventorstatefacts.
i. Itcanoffer suggestionsandadvice.
ii. It can provideinformation onvarious topics/subjects.
iii. Itcandescribealocation, person, object, technology,etc.
iv. Itcansimplyamuseandbringasmileonthereadersface.
v. Itcanenablereaderstothink,henceitcaninfluence.
vi. It can offer opinions, arguments/counter arguments.
vii. Itcanbringaboutacomparison

Chapter-8 : Article Writing - 349 -

Q3 WritetheformatofanArticle.
9 An article isusually considered part of informal writings.
9 Therearenorulesortechniquestoabidebywhilewritingarticles,yetanorganizedstructureis
preferred. Following isthe basic outline oftheformat.
I. Heading/Title:TheheadingorthetitleshouldbeEyecatchingandshouldillustratethecentral
theme
II. ByLine:Writer’sname(tobementionedunderthetitletowardstheright)
III. Introduction:Establish thecontext.Drawthereaders’attentionusinganecdotes,startlingfacts,
statistics, symbolic questions or quotations.
IV. Body: 23 paragraphs detailing the various aspects of the topic i.e. merits, demerits, causes,
consequences, effects, advantages, disadvantages.
V. Conclusion:Aformalandlogicalendtotheabovewrittencontent;asummaryofallthathasbeen
included in the article. One may conclude with a final opinion, recommendation or a comment
expressingahope,awarning,anappealoracallforaction.
Q4 Writetheimportantpointsaboutanarticle.
i. Thetopics shouldbe unique and ofrelevance.
ii. Know the target audience.
iii. Identify the aim of writingthearticle toadvice, inform, entertain,compare,describe,etc.
iv. Thetitleshouldbeshortandeyecatching.
v. Begin witha strikingopening sentence which getsthe readersinterested in the topic.
vi. Thewritermusthaveenoughtosay;chooseyourideasbeforehand.
vii. Betruetowhatyouwrite,makeassertionsandgobythemthroughoutthearticle.
viii. Keep the article brief;unnecessary repetitions and irrelevantinformation makes it boring.
ix. Breakthearticleintoparagraphs;itactsasabreather.
x. Payattentiontothechoiceofvoiceandtense.
xi. Conclude logically.
Q5 ExaminethestepsinArticleWriting.
Likereports, articlestoo need to bewell writtento holdthe readers’ attention. The stages ofarticle
writing are discussed below.
Step1: Identifythe targetaudience
Beforeyoubeginwriting,itisimportanttoconsiderwhotheintendedreadersare.Aretheyaspecific
groupsuchasstudentsorbusinessmen,oradultsingeneral?
Step2:Identifythepurposeofwriting
Identifytheaimofthearticle.Isyouraimtoadvise,suggest,inform,compareandcontrast,describe,
etc.?
Step1andStep2arethedecidingfactorsinthelayoutofyourarticle,itsstyle,languageandlevelof
formality.
Example:
If the topic for the article is ‘Careers in Commerce’, then the target audience will be students of

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-350-
 Commerce. The article would be an informative one detailing the various careers that a commerce
student can choose from, colleges / universities, eligibility and selection process. The tone must be
formal and the language easy and straightforward. If the article is meant fordoctors then technical
jargonrelatedtothefield ofmedicinecanbeused.
Step3:Collectandselectinformation
The third step is to collect information that is available on the selected topic. You may use various
sourcessuchasbooks,interviews,etc.Readthroughthemandselectrelevantinformation.Itisimportant
toensurethattheinformation youhavecollectedisauthentic and reliable.
Step4:Organizetheinformationsequentiallyandlogically
Oncetheinformationhasbeengatheredandselected,youmustorganiseitsothatitfollowsalogical
order.Youcanmakeuseofmindmapsandflow–chartstoorganisethecontent.

Chapter-8 : Article Writing - 351 -

Step5:Writethearticle
9 Onceyouhavedeterminedtheinformationyouaregoingtouseandorganizedyourideas,write
the article. The article could be formal, semiformal or informal, depending on your intended
audience.
9 First,giveyourarticleatitlethatcatchestheattentionofthereader.
9 Thenbeginwritingthearticlewithastrikingopeningsentencewhichaddressesthereadersand
getstheminterested inthe topic.
9 Remembertopresentastrongargumentforyourideassupportingitwithevidencesorelaboration.
Your attempt must be to develop your ideas as much asyou can to make them interesting and
substantial.
9 Finally, conclude with your strongest point.
9 Usevocabularyanddescriptivelanguageappropriateforthearticle.Linkingwordsandexpressions,
andavarietyofvocabularywillonlyimproveyourworkandmakeitmoreinteresting.
9 Use passive voice, humor, rhetorical questions to provide a specific effect.
9 Donottalkaboutyourself. Youarewritingforthegeneralpublic,notaclosecircleoffriends.Your
opinions are only interesting to other people if you can make them amusing, justify them or
explain them.
Sample Articles
Thecolorgreen:corporateconscienceorfashionstatement?
by Brendon Craigie
Hot wire has conducted a major audit looking at the greening of corporate communications and its
potential influence on consumer purchasing habits across Europe.
Theyresearchedfivesectors(retail,banking&finance,manufacturingandautomotive,utilitiesand
technology&telecoms)infivecountries(theUK,France,Germany,SpainandItaly)lookingathow
frequently companies  use green issues in their external communications vehicles. In this instance
press releases were selected as the representative communications tool. We coupled this with pan
European consumer research that identified how green issues affect the purchasing decisions of
consumersinthesamesectorsandcountries.
Contrary to popular opinion, companies across Europe do not green wash their communications
wholesale.TheHotwirestudyhasfoundthatacrossallthesectorsgreenappearedasathemerelatively
infrequentlyinonly7.5%17%ofcompanies’externalcommunications.Frenchcompaniesusegreen
issuesthemostat17%whileGermancompaniesareleastlikelyat7.5%.Theseareinterestingfindings
withGermanyverymuchaninternationalleaderintermsofenergyefficiencyweputitmoredownto
regional ‘style’ than the reality of the companies’ initiatives. However, while it is good to see that
companiesarenotoptingfora cheapgreenwashacrossthe board,itisalsointerestingtonotethat
they are not in synch with consumer interest for green products and services. While companies
communicate about green issues relatively infrequently the consumer interest in all things green is
very high. When asked to score their interest in ‘green’ between 1 and 10 (10 being the highest)
European consumersscoredonaverage between6.3 (Germany)and 8(France).Consumers in Spain,
theUKandItalyscored7,7.2and7.7respectively.Inotherwords,consumerinterestisveryhighbutin
termsofcorporatecommunications,companiesarenotdoingmuchtosatisfytheinterest.
Thetechnology&telecomssectorisaninterestingsectorintermsofhowitcurrentlycommunicates
aroundgreen,andwhatinfluencesthebuyingdecisionwhenpurchasingtechnologyproductsand
services.TheUKistheonlycountrythatcommunicatesinanyvolume(22%oftechnologycompanies’
externalcommunications)about‘green’.At5outof10,theconsumerresearchindicatesthat‘green’is
not a very compelling driver for British consumers in the technology space,however there is some
interestandUKbasedcompaniesaredoingafewthingstogarnerthatinterest.IntherestofEurope
PR professionals in the technology space have hugeopportunities.Whileconsumerinterestispretty
Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-352 -
 highatbetween5.5and6.1,thecompanies’corporatecommunicationseffortshavesofarignoredthe
green agenda. In France only 7% of external communications by technology companies include the
green theme,inGermany1%,Spain2.9%andinItaly0%.Therearesomebigopeningsforbeingthe
greenchampioninthetechnology&telecomsindustriesinFrance,Germany,SpainandItaly. (Source:
http://www.reusablearticles.com)
Article2
TheHealthProblemsofTattoos
byPaulSilver
Tattooshavebeenaroundforthousandsofyears,buttheyhavealwayshadtheirhealthproblems.The
main potential problemwithgetting a tattoo isinfection.
The tattooing process involves pushing pigment far down into the dermis of the skin with a needle.
Withmodernstainlesssteelandsterilizationmachines,thisismucheasiertokeepcleanandproblem
freethantheoriginaltattooingmethodofrubbingashintowounds,butproblemscanstilloccur.Ifa
tattooing needle is not completely and totally clean when it pierces your skin, it can deposit germs
deepintotheskinalongwiththepigment itisdelivering.
AmajorproblemwithinfectionfromuncleantattooingisitcaninfecttherecipientwithHepatitisB.In
turn,hepatitiscancauseinflammationoftheliver,whichispainfultostartwith,andiflefttodevelop
canbecomechronicandcauselongtermdamageandevendeath.
InitialsymptomsofaHepatitisinfectioncanlastforuptotwoweeks,andincludearaisedtemperature,
headache,andlackofenergy.Afterthis,jaundicecandevelop,andthenpotentiallyanorexia,nausea,
vomiting and diarrhea.If left untreated you will probably then experienceupper abdominal pain, a
tender, enlarged liver and enlarged lymph glands in your neck.
Bythispoint, thepain andothersymptomsshouldhave takenyouto the doctors.They willneed to
carryoutbloodteststoconfirmwhichstrainofHepatitisyouhavecontracted(therearefivetypes,A
E.)Ifyouhavedevelopedabadinfection,youmayneedhospitalcaretorecover,mainlysodoctorscan
spotifyouhavetheearlystagesofacuteliverfailure.
Up to 95% of adults with a Hepatitis B infection will recover fully, but the rest may develop lifelong
chronic  Hepatitis, especially if they already have immunodeficiency problems before they get the
infection.
Infection can be prevented by good living conditions, and Hepatitis B can be prevented with a
vaccination, whichmany tattooists willhave asa preventativemeasure as they do not wishtocatch
HepatitisBfromtheircustomers,someofwhomaycarryitunknowingly.
Whenyoureceiveatattoo,beconfidentthatthetattooist’sequipmentisproperlysterilised,thatthey
havebeencheckedoutbythelocalhealthdepartment,andthatyou’reconfidentthattheyareclean.
No responsible tattooist will mind showing you how they ensure their equipmentis clean and safe.
When the tattoois healing, make sure you keep the tender area clean, and that you do not expose
yourself to possible infection through poor hygiene or living conditions.
Afterreceivingyourtattoo,ifyourunatemperature,getheadachesorasuddenlackofenergytodo
anything,getintouchwithyourdoctorstraightaway.Itismuchbetterforittobediagnosedasnot
beingaproblemthantoriskhavingaHepatitisinfectionandnothavingittreatedasearlyas
possible.
Instead of getting a permanent tattoo, you could get a temporary one. They are available in a wide
rangeofdesigns,fromstartattoostotribalstyles,anddon’tcarryanyriskofinfection.(Source:http:/
/www.reusablearticles.com)
Article3
Genius has gender? Only in our minds
When Cambridge University advised its examiners to avoid words like ‘genius’ and ‘brilliant’ because

Chapter-8 : Article Writing - 353 -

 theyexcludewomen,manyof usrolledoureyesanddismissed itas politicalcorrectness gonewild.
Butcloseyoureyeswhat’sthefirstimagethatcomestoyourmindwhenyouhearthewordgenius?
IsitAlbertEinstein?StephenHawkingorSrinivasaRamanujan,perhaps?ShakespeareorPremchand?
SteveJobs?Whetheryou’refemaleormale,oddsareyourmindseesaman.
Theseassociationsaffectourperceptionsofothers,whichinturnaffectstheirselfimageandchoices.
Gendergapinthesciences,forinstance,canbepartlyexplainedbythenotionthattheseareascall
for ‘genius’ or raw natural ability, which many women don’t feel confident they possess. Reasons for
thatlackofconfidencearealsocultural;intheUSadepressingpieceofresearchfoundthatevensix
yearolds were likely to think of only boys as ‘brilliant’. When professors are rated, it’s men who’re
described  as stars and visionaries, and the same qualities are overlooked or disparaged in women.
Thinkof theroutine putdown ‘hysterical’,which literallymeansadisorder caused bythe womb. The
ideaofalonegeniusisaRomanticmyth;hardwork,collaborationandluckhaveasmuchtodowith
accomplishment as ability, and none of these traits are sexual characteristics. Thinking harder about
howweflingaroundwordslikeflairandbrilliancemightfosterabetterintellectualclimate,allaround.
(Source: http://blogs.timesofindia.indiatimes.com)

CLASSWORK

Q1 Readthefollowingarticlesandprovideasuitabletitle.
Article1
Stocks related to the consumption theme have taken a severe beating ever since the Prime Minister
announcedthedemonetizationofRs500andRs1,000noteson8November.TheNiftyIndiaConsumption
Index has shrunk 11.4%. Some stocks have slipped up to 21%. The fear that the demonetization drive
would put a leash on highticket spending by consumers has spooked sentiments. While the current
outlook is bleak, analysts say this selloff provides a good opportunity for investors to enter certain
stocks,astheconsumptionstoryremainsonasolidfooting.
heselloffintheconsumerbasketisbackedbyreason.Consumersentimentsouredafterthegovernment
suckedoutliquidityfromthesystembyremovingRs500andRs1,000notesfromcirculation.Peopleface
an uphill task managing their liquidity position with the limited stock of lower denomination notes in
circulationanddifficultyintransactingwiththenewRs2,000notes.
Formost,thefocusinthenearfuturewillbeonpreservingcashandplanneddiscretionaryspendingwill
beputonthebackburner.Inthenearterm,discretionaryspendingandsectorsreliantonthecasheconomy
willbe affected.Theruralsegment, wheremost transactionsare incash, willtake the biggest hit.This
will dent largeticket sales of two wheelers, passenger vehicles and consumer durables. “Rural and
semiurbanmarketscan seeasignificantcut indiscretionary spend.
Q2 Writearticlesonthefollowingtopicsinabout500words.
1. Cardpaymentonahighafterdemonetization
2. Mumbai: Nolonger India’s economiccapital
Q3 BENGALURU:RealestatebrokersinKarnataka,hitbyslowdownanddemonetization,fearthatthenew
draft state Real Estate Regulator Act (RERA) will make their business unviable, with some even
apprehendingtheprospectofaclosure.Thegovernmentexpectsanagencytopayaproposedregistration
feeofRs5lakhinthecityandRs2.5lakhinruralareasinthenewstateRERArule.Currently,80%are
individual agentswhile just20% work with agencies inthe city.

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 Theregistration fee setby the regulatory authorityin GujaratandUttarPradesh isRs 10,000,which is
muchmoreaffordableinthelightoftherelativelylowerincomelevelsofrealestateagents.“Theagents
workforameretwopercentcommissionontheconsiderationvalue.Thehighcostofoperationsandthe
long gestation period in real estate transactions diminish the real returns. Given this, it is unviable to
expect areal estate agent to pay Rs5 lakh as registration fee,” said Farook Mahmood, CMD, Silverline
Group,arealestatedeveloperandabrokingcompany.
The Bangalore Realtors Association of India (BRAI) has expressed its reservations on the proposed
rules,thefirstbeingregistrationfees,andtheotheristhe issueofpenaltiesfordefaultbydevelopers.
“Suchmeasureswillbeasetbackforthetrade,”saidAyubKhan,owner,APEXEstates&Properties,areal
estate brokerage firm in Bengaluru.
Q4 Writearticlesonthefollowingtopicsinabout500words.
1. Unempolyment:Anobstacle in the country’seconomic growth 2.Phishing

HOME WORK1

Writearticlesonthefollowingtopicsinabout500words.
Q1 Internet Etiquettes (Netiquettes)
(Netiquetteisa combinationofthewords networkandetiquette,andisdefinedasasetofrulesfor
acceptable online behavior. Similarly,online ethics focuses on the acceptable use ofonline resources
in an online social environment.)
Q2 Savetheriversandcowsforsavinghumanity
Q3 Shouldabortionbeallowed,andatwhatpoint?
Q4 Should Bitcoin be legal?

Chapter-8 : Article Writing - 355 -

 HOME WORK2

Q1 WriteanArticleofabout350wordsonthetopic“Growinghealthproblemsintheyouthtoday”.

Q2 Writeanarticleonthefollowingtopics.(Wordlimit:300words)

(1) Discussabouttherepercussionsofallowingstudentsinschooltohaveafeedbacksystemfortheir
teachers

(2) Let’s change the environment by……..

Q3 Writeanarticleofabout250wordsonthetopic“TheFearlessIndianArmy”, [Sugg.May19,5Marks]

Q4 Writeanarticleofabout250wordsonthetopic“Globalwarming”. [Sugg.May18,5Marks]

Q5 Write an Article of about 250300 words on the topic “What is more important—Physical fitness or
Mental fitness? [MTPApril19,5Marks]

Q6 WriteanArticleofabout250300wordsonthetopic“Socialmediainterfereswithpersonallife”

[MTPMarch19,5Marks]

Q7 WriteanArticleofabout250300wordsonthetopic“TeamBuildingforSuccess”.

[MTPOct19,5Marks]

Q8 WriteanArticleofabout250300wordsonthetopic“Socialmediainterfereswithpersonallife”.
[MTPAug19,5Marks]
Q9 Scheme of Indian Government for Women empowerment. [RTPMay20]
Q10 Language is species specific. [RTPMay20]

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Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-358 -
 CHAPTER9
REPORTWRITING

INTRODUCTION
Areportisanaccountgivenofaparticularevent,issue,subject,especiallyintheformofanofficial
document,afterthoroughinvestigationorconsiderationbyanappointedpersonorbody.Itiswritten
foradefinedpurposeandforaspecificaudience.

Q1 Whatisa report?

x A report is an account given of a particular event, issue, subject, especially in the form of an
Officialdocument,afterthoroughinvestigationorconsiderationbyanappointedpersonorbody.
x Itiswritten foradefnedpurposeandforaspecificaudience.
x Informationandevidenceisobjectivelyandinaclearandconcisemanner.
Q.2 WhatarevarioustypesofReports?Explaintheirformats.
TypesofReports
1. Newspaper report
2. Magazine report
3. offi cial reportsfor various organisations
Formatof variousreports
1. NewspaperReports:Theseareaccountsofcurrenteventsandhappenings
Title/Headline
By(nameofauthor)
Place,date(dateisnotalwaysmentioned)
Bodyofreport.
2. MagazineReports:Thesearewrittentogiveaccountofspeciceventsthathavetakenplace,for
example, IndiaInternationalFashionWeek,SchoolAnnualDayetc.
Title/Heading
By(nameofauthor)
Bodyofreport.
3. Formal/OfficialReports:Thesearecomplexdocumentsoftenofimportantprojectsandproposals,
eg.resultsofstudiesandexperiments,proposalsforlaunchinganewproductetc.

Chapter-9 : Report Writing - 359 -

 Format1
Heading
To:
From:
Date:
Subject:
Introduction:
Givedetailsofthetaskandthereasonsforit
MainBody:
Information,resources andmaterialused,
Descriptionoftask
Results
Conclusion
Yourevaluationandsuggestions.
Format2
1. Title pageinclude
a) To:name ofpersonreportbeingsubmittedto
b) From:nameanddepartment
c) Date of submission
d) Acknowledgements:Alistofpeopleandorganizationsthathelpedyouincollectingdata,research
andinotheraspectsofgettingthereportready.
2. Tableofcontents:aclearlistofallsectionsandsubsectionsofthereport.
3. Summary: A summary of the major points, conclusions, and recommendations should bewritten to
giveageneralideaofthereport.
4. Introduction:Explaintheproblemandmakecleartothereaderwhythereporthasbeenwritten.
5. Findings:Givedetailsoftheinformationcollected,materialused,methodsutilized,andresultsarrived
at.
6. Conclusions: Include implications and inferences of your ndings based on the facts described in your
mainbody.Theimportanceofthestudyisdiscussedinthissection.
7. Recommendations: Give suggestions and proposalsbased on information and data collected.
8. Bibliography/References:Givea list ofall thesources you have referred withinyourtext.
Officialreportwritingassuchdoesnothaveaspecic,xedformat.Manyorganizationshavetheirown
formatsandstylesthatareusedbytheiremployees.Moreover,therearedierencesintypesofOfficial
reports,for example,companyannualreports, auditreports,nancialreportsetc.
WhatarethePointstorememberbeforedraftingareport.
Q3 Explainthepointstobekeptinmindbeforedraftingreports.
1. All reports are objective. There is no place for your personal opinions, perceptions, emotions and
feelingsinareport.Yoursuggestionsandrecommendationsarebasedonfacts,dataandnot subjective
views.
2. Keepinmindthetargetaudienceandstructureyourreportaccordingly.
3. Personalpronounsinrstandsecondperson(I,me,we,us,you,)aregenerallynotusedinareport.
Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-360-
 4. Passivevoiceispreferablyusedinwritingnewspaperandmagazinereports.Activevoicecanbeused
in Officialreports.
5. Past tense is mostly made use of in report writing since we are reporting happenings, which have
already taken place.
6. Thelanguageshouldbeclear,conciseandtothepoint.Longwindingsentences,vagueinformationand
irrelevant material must not be included.
7. Technicaljargonandsubjectspecicterminologyisbestavoidedsinceallpeoplecannotunderstand it.
Ifincludingsuchterminologyisnecessary,addaglossaryforit.
8. Informationshouldbeorganizedlogicallyandcoherently.Manyreportsarewritteninthechronological
order, i.e., following the sequence in which the event occurred. A poorly structured report makes no
sense tothereader.
9. Yourreportshouldnothaveanygrammarandsyntaxerrors.Itisagoodideatogetitproofreadfor
accuracy.
Flowchart belowexplainsthesequenceinvolvedinReportWriting

Chapter-9 : Report Writing - 361 -

Q4 Explainstepsinreportwriting.
Allreports need to beclear,concise and well structured. A wellwritten reportrequires planningand
preparation. The essential stages of successful report writing are described below.
Step1Understandthepurposeofthereport
x Itistheimportantthatyouunderstandthepurposeandrequirementsofyourreport.
x Keepinmindwhothereportisfor,andwhyitisbeingwritten.
x Besurethat you understandalltheinstructionsorrequirements.
Step2Gatherandselectinformation
x Gatheringinformationisatimeconsumingandoneroustask.
x You have to choose appropriate sources,read them and select only relevant information.
x Ensurethatyoursourcesareauthenticandreliable.
Step3Organizeyourcontent
x Agreatdealofinformation iscollectedduringtheresearchperiod.
x Sortoutandselectthecontentrelevanttoyourreport.
x Grouptogetherthepointsthatarerelated.
x Theycanbeputtogetherundersectionsorchapters.
x Thereafter, decide the sequence in which they have to be presented. Choose an order that is logical
and easy to follow.
Step4Analyzeyourmaterial
x Priortowritingyourrstdraftforthereport,analyzethematerialyouhavegatheredcritically.
x Look through carefully at the material, thinkingabout aws and limitations inevidence gathered, con
ictingdata,verifiableconclusionsthatcanbedrawnfromit.
Step5Writethereport
x After your material has been organized into appropriatesectionsand headingsyou can write the rst
draftofyourreport.
x Somepeoplewritethesummaryandcontentspageattheendwhentheyknow exactlywhatwill be
included.
x  Write clearly and concisely. Avoid irrelevant, lengthy and confusing explanations or content.
Step6Reviewandredraft
x Takeabreakbeforeyoureviewyour rstdraft.
x Itisessentialtogetanappropriateperspectiveonthedraft.
x You may rewrite or reorganize certain sections after thereview.
x Assess,withoutanybias,thereportfromtheperspectiveofareaderintermsofclarity,simplicityand
relevance.
Step7:Presentation
x Onceyouarereadywithyourfinaldraft,checkthepresentationofthereport.
x Makesurethatthewordingofeachchapter/section/subheadingisclearandaccurate.
x Ensure proper sequencing in numberingof chapters, sections and appendices.
x Verify that you have mentioned all your sources and references.

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-362 -
 x Checkyourreportforerrorsofspellingorgrammar.
x Errorsinpresentationorexpressioncreateapoorimpressionandcanmakethereportdifficulttoread.
SampleReports
Newspaper Reports
Sample1

Daughter of GardenerTops Board Exam‘

ByRiyaSharma

Bhubneshwar,May12:SumanNayak,thedaughterofamunicipalgardener,OmNayak,hastoppedthe
OdishaBoardSeniorSecondaryExaminationwith98.8%marks.Hersuccesshasbeenlaudedbythesta
members ofher school‘The Government Senior Secondary School, Malkaganj’, the Odisha Education
board andtheStateEducationMinister.
WhenthenewswasconveyedtoSumanbyherclassmates,shedidnotbelievethem.Itwasonlywhen
theschool principalcalled herthat therealitysunk in.Suman’sfather,OmNayak,isoverjoyed atthe
news.Hesaid,“Sumanwasalwaysabrightstudent.Ihavemadealleortstoprovideherwiththebest
education despite my meager means”. He hopes that she will be able to continue her education in
spite of his nancialconstraints.
Sumanattributeshersuccesstoherparentsndteachers.Shesaidthattheschoolteachershadprovided
herwithallpossiblehelpbygivingherextratimeandattentionalongwithbooksandmoralsupport.
Herperseverance,dedicationandhardworkarespokenhighlyofbyherteachers.
When asked about her future plans, Suman said she wished to become a doctor. However, she was
unsureifshecouldpursueherdreambecauseofnancialproblems.Shehopesthatshewillbeableto
secureascholarshipandgetfundingbythegovernment.
TheTimes Grouphas started aninitiative tohelp Sumanful llheraspirations. Anyone who wishes to
contribute to Suman’s education can send the amount by cheque to, ‘Suman Nayak Education Fund’,
TheTimesof India, M.G.Road,Bhubneshwar.
Sample2

Commercialtaxdepartment totrainits oficials and industryparticipants

TNN|May6,2017
INDORE:WithanaimtobecomewellequippedwiththenewGoodsandServicesTax(GST)andaddress
concernsofdealers,thecommercialtaxdepartmentstartedtotrainitsocialsandindustryparticipants
fromFriday.Thedepartmenthasselected25locationsinthestate,covering23citiesondierentdates.

ManojChoubey,deputycommissioner,commercialtaxdepartmentsaid,“Ouraimistobefullyprepared
tohandleGSTfromJuly.WestartedatrainingsessionfromFridaythat willmostlikelyextendtillthe
endofthemonthacrossMadhyaPradesh.”
Initially, the department will train all its oficials and then conduct interactive training sessions for
dealers.
GST — to be implemented in the country from July 2017 — aims to provide a single window tax
structure across the country, simplifying tax refunds and interstate transfer of goods and ensure
merchant compliances.

Chapter-9 : Report Writing - 363 -

 Accordingtothetaxdepartment,about2,200ofitsocialsacrossthestatewillbetrainedbyexperts.In
Indore,twolocationshave beensetbythedepartmenttoconducttrainingsessions.
There are about 3 lakh dealers across the state registered with the commercial tax department of
whichcloseto50,000arefromIndore,taxexpertssaid.
“Weplantoconductcorporatetrainingaswellunderthesession.Trainingsessionwillbringclarityand
technical knowhowaboutdealingwithtaxreturnsandotherthingsunderGST,” Choubeysaid.
Industryparticipants haveraisedseriousconcerns about various norms underGSTstatingthelackof
clarityandtrainingwillleadtodicultiesinhandlingGST.Thiswillproveespeciallytrueforsmallunits
thatarenottechsavvyanddonothaveaccesstointernet.
Theysaidsmallindustriesarenotcomputerliterateandtheywillhavetoemployadditionalmanpower
tolereturnseverymonth.
(Source:TheTimesofIndia)
MagazineReport
Sample1
St.AgnesPublicSchool CelebratesAnnualDay
ByManojUpadhaya

St.AgnesSchool,GreenPark,celebrateditsannualdayonMay2withgreatfanfare.Mr.ArvindKejriwal,
theChiefMinisterofDelhi,wasthechiefguestatthefunction.Theprogrammebeganwiththelighting
of the lamp by the chief guest. It was followed by a welcome address and the presentation of the
schoolannualreportbytheprincipal,Ms.SwatiMehra.
Therstitemoftheculturalprogramwaspresentedbytheprimarywing.Itwasamusicaldramaonthe
necessity of protecting the environment for the future generations. The little children expressed
themselves brilliantlybringing out the perils of destroyingour planet.
ThemiddleschoolshowcasedthecultureofIndiathroughfolkdances.Each dancewaspreceded by
beautifulaudiovisualeects,depictingthemainculturalfeaturesoftheregion.Thecolourfuldresses
ofthegracefulGarbadancers,thevigourandenergyofBhangradancers,andliltingmusicwithelegant
swayingmovementsoftheBihuandHajgiridancersfromtheNorthEast, enthralledtheaudience.
The senior school pupilsenacted a play depicting the dangers of internet and socialmedia addiction
foradultsandchildren.Theybroughtoutthemessagepoignantly.Everychildandadultwasmovedby
theactingandstoryofayoungliferuinedbysocialmediaaddiction.Theaudiencegavealoudandlong
round ofapplause forall participants.
The grand nale was the speech by Mr. Arvind Kejriwal. He highly praised the performances by the
children and appreciated the thought provoking themes chosen by them. Theprogrammeconcluded
withavoteofthanksbySagarMehta,theschoolheadboy.
Sample2
Almost 900 H1N1 cases reported: WHO
HeadlinesToday
Geneva,May4,2009
ThoughtheWorldHealthOrganisation’s(WHO)alertlevelremainsoneshortofaglobalpandemic,18
countrieshavenowreportedlaboratoryconrmedcases.

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 ThenumberofsuspectedH1N1ucasesacrosstheglobehastouched898with20confirmeddeathsso
far.ThoughtheWorldHealthOrganisation’s(WHO)alertlevelremainsoneshortofaglobalpandemic,
18countrieshavenowreportedlaboratoryconrmedcases.
Colombia became the firstSouthAmerican countrytoreporta case.However,UShealth officialsare
cautiouslyoptimisticthattheuisn’tasdangerousasitwasrstfeared.
Mexicoremainstheworstaectedwith506casesand19deaths.However,thecountry’sHealthSecretary
feels that the epidemic is now declining.
ButtheWHOisnotdroppingthelevelfivealertjustyet.
(Source: India Today)
Financialreport
Financialreportsareverylongandcomplicatedwithcomplexdataandfigures.Ashortreportisbeing
given as an example.
Sample

NuvoPharmaceuticals™Announces2017FirstQuarterResults
ReportsQ1Revenueof$7.0millionandNetIncomeof$2.2million
MISSISSAUGA,ON,May10,2017/CNW/NuvoPharmaceuticalsInc.(NuvoortheCompany)acommercial
healthcare company with a portfolio of commercial products and pharmaceutical manufacturing
capabilities,today announcedits nancialandoperationalresultsfor therstquarterended March31,
2017.
First Quarter Financial Summary(1)
TotalrevenueforthethreemonthsendedMarch31,2017was$7.0millioncomparedto$7.8millionfor
thethreemonthsendedMarch31,2016.
AdjustedEBITDAdecreasedto$2.3millionforthethreemonthsendedMarch31,2017comparedto
$3.0millionforthethreemonthsendedMarch31,2016.
Netincomefromcontinuingoperationswas$2.2millionforthethreemonthsendedMarch31,2017or
$0.19persharecomparedto$1.9millionor$0.17pershareforthethreemonthsendedMarch31,2016.
Cashandshortterminvestmentsincreasedto$18.6millionasatMarch31,2017comparedto$17.6
millionasatDecember31,2016.
1) Thenancialinformation presentedhereinreectsresultsfromcontinuingoperationswith Nuvo’s
previously disclosed segment, Crescita, presented as a discontinued operation.
2) AdjustedEBITDAisanonInternationalFinancialReporting Standards(IFRS)nancialmeasure de
ned by the Company below.
FirstQuarterFinancialReview
Table of Selected Financial Results
Forfurtherdetailsontheresults,pleaserefertoNuvo’sManagement,DiscussionandAnalysis(MD&A)
and Condensed Consolidated Interim Financial Statements which are available on the Company’s
website.

Three months ended

Chapter-9 : Report Writing - 365 -

 March31, March31,
2017 2016 Change
(from continuing operations, Canadian dollars in thousands,
except gross margin) $ $ $
Product Sales 6,653 7,325 (672)
GrossMargin%onProductSales 58% 57% 1%
Other Revenue 329 517 (188)
Total Operating Expenses 4,716 5,378 (662)
Net Income 2,196 1,928 268
Adjusted EBITDA 2,298 2,989 (691)
Total revenue, consisting of product sales, royalties and contract and other revenue for the three
monthsendedMarch31,2017was$7.0millioncomparedto$7.8millionforthethreemonthsended
March31,2016.Thedecreaseintotalrevenuewasprimarilyrelatedtoadecreaseinproductsales.
TotaloperatingexpensesforthethreemonthsendedMarch31,2017decreasedto$4.7millioncompared
to$5.4millionforthethreemonthsendedMarch31,2016.Thedecreaseinoperatingexpenseswas
primarily attributable toa decreasecost of goods sold (COGS) and general and administrative (G&A)
expenses, slightly o set by an increase in research and development (R&D) expenses.
R&Dexpensesincreasedslightlyto$0.3millionforthethreemonthsendedMarch31,2017compared
to$0.2millionforthethreemonthsendedMarch31,2016.Inthecurrentquarter,theCompanyincurred
R&Dexpensesrelatedtothe2016Pennsaid2%Trialforthetreatmentofacuteanklesprains.
G&Aexpensesdecreasedto$1.7millionforthethreemonthsendedMarch31,2017comparedto$2.1
millionforthethreemonthsendedMarch31,2016.Inthecurrentquarter,a$1.0milliondecreasein
stockbased compensation (SBC) expense was partially o set by an increase in regulatory consulting
feesandanincreaseingeneralcorporatecostsduetotheallocationofcertaincorporateG&Acoststo
Crescita in the comparative quarter.
The Company earned net interest income of $38,000 for the three months ended March 31, 2017
comparedto$56,000forthethreemonthsendedMarch31,2016.Thedecreaseinnetinterestincome
inthecurrentquarterrelatedtothesignificantlylowercashbalancesascomparedtothecomparative
periodwhereby$35.0millionwastransferredtoCrescitaonMarch1,2016aspartofthereorganization
transaction.
The Company experienced a net foreign currency loss of $0.1 million for the three months ended
March 31, 2017 compared toanet foreign currency loss of $0.5 millionfor the threemonthsended
March31,2016.
Netincomefromcontinuingoperationswas$2.2millionforthethreemonthsendedMarch31,2017
compared to $1.9 million for the three months ended March 31, 2016. In the current quarter, the
decreaseingrossmarginandaslightincreaseinR&Dexpensesweremorethanosetbyadecreasein
G&Aexpensesand a decrease in foreignexchange losses.
AdjustedEBITDAdecreasedto$2.3millionforthethreemonthsendedMarch31,2017comparedto
$3.0 million for the three months ended March 31, 2016. In the current quarter, an increase in net
incomefromcontinuingoperationswasmorethanosetbyadecreaseinSBCexpenses.
(Source: Medical Pharmaceuticals)

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-366-
 CLASSWORK

Q1 Yourinstitute‘GlobalBusinessSchool’organizedaseminaron‘ProtableBusinessPracticesintheNext
Decade’.Writeareportontheseminarforyourinstitute’smonthlynewsletterinabout150/200words.
(Hints:researchhowaseminarisconductedandwhatareprotablebusinesspractices).
Q2 You are the Cultural Society President of your college. The Principal of your college, Mr. Subhash
Kapoor,feelsthatintheincreasinglywesternizedworld,thestudentsshouldnotlosetouchwiththeir
cultureandvalues.Hehasaskedyoutosuggestwaysandmeanstofamiliarizethestudentswiththe
greataspectsofIndianculture.Prepareareportin150200wordsfortheprincipalsuggestingtheareas
thatcouldbecoveredandthewaysandmeanstheybeintroducedintocollegelife.(Hints:selectareas
andmethodsthat appealtoyoungsters).
Q3 YouareMr.SunilKaushik,theadministratorofGyanJyotiInstitute.Certainareasoftheinfrastructure
ofyourinstituteneedtoberestructuredandrevamped.Youhavebeenaskedtoprepareareport on
thematterforthemanagingcommitteeoftheinstitute,statingthespecicbuildingsthatneedfacelift,
and the areas that need attention (example furniture, auditorium, cafeteria). Use the formal report
format.
Q4 YouareReenaSingh, areporteroftheTheTimesofIndia’. Writeareportonarein aslumclusterin
Seelampuriin150to200words.
Q5 Youaresportsreporter,AjaySingh.WriteareportontheonedaycricketmatchbetweenAustraliaand
IndiaatMelbournein150to200words.

HOMEWORK1

Q1 You are a reporter in Indian Express. Write a newspaper report on Gandhi Jayanti Day celebrated in
yourcityin150to200words.
Q2 Youareasecretaryinacompany.Writeareporttothedirectorofthecompanyaboutrestlessnessof
theworkersandtheirthreateningforstrikein150to200words.
Q3 Youareworkinginanacademicinstitute.Yourinstituteorganizedaguestlectureonexplainingthelast
budgettothestudentsbyaneminenteconomist.Writeareportforyouinstitute’smagazinein150to
200words.

Chapter-9 : Report Writing - 367 -

 HOME WORK2

Q1 Writeareportforyourschoolmagazine,aboutaculturalfestheldinyourschoollastweek.Mention
thevariousschools thatparticipated,the culturalprogrammes,thefood stallsetal.

Q2 AnNGOworkingforthecauseoftheunderprivilegedhadsetupaonedayworkshopinyourcollege.As
member of the Organizing committee, write a report for your college magazine giving details of the
workshop.(250300 words)

Q3 AstheSchoolCaptain,writeareportforyourschoolmagazine,aboutaculturalfestheldinyourschool
lastweek.Mentionthevariousschoolsthatparticipated,theculturalprogrammes,thefoodstallsetal.
(250300words)

Q4 WriteaNewspaperReportin250wordsonthetopic:”DaughterofGardenerTopsBoardExams.”
[Sugg.Nov18,5Marks]

Q5 DraftNewspaperReporton“SixLanehighwayconnectingtwostatesinaugurated”tobepublishedin
a national newspaper. [Sugg.May19,5Marks]

Q6 Draft Newspaper Report on “Flood situation grim in southern, western states” to be published in a
National newspaper. [Sugg.Nov19,5Marks]

Q7 You are Sameer Goyal,a reporterof ‘The Hindu’newspaper.Write a report on Fake/fraud Calling for
GettingOTP/PasswordintheNoidain150200words. [MTPOCT19,5Marks]

Q8 AnNGOworkingforthecauseoftheunderprivilegedhadsetupaonedayworkshopinyourcollege.As
member of the Organizing committee, write a report for your college magazine giving details of the
workshop. [MTPAug19,5Marks]

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-368-
Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-370-
 CHAPTER10
WRITINGFORMALLETTERSANDOFFICIALCOMMUNICATION

UNIT1
FORMALLETTERS

INTRODUCTION
Lettersareatraditionalandpopularmethodofcommunication.Aletterisawrittenmessagewhichissentfrom
one party to another and contains important information.Lettersperform the function of bringingfriends or
relativesclosertogether, enhancingprofessionalrelationshipsand providingameansof selfexpression.There
aretwotypesofletters,i.e.formallettersandinformalletters.

Q1 Explainthecharacteristicsofletters.
9 Lettersareatraditionalandpopularmodeofcommunication.
9 A letter is a written message which is sent from one party to another and contains important
information.
9 Lettersperformthefunctionofbringingfriendsorrelativesclosertogether,enhancingprofessional
relationships and providing a means of self expression.
9 There aretwotypes ofletters,i.e.formallettersandinformalletters.
Q2 Explaininformalandformalletters.
Informal Letters
Informal letters are letters written to familiar people, like relatives and friends. They are used for
casualandpersonalcommunication.Whilewritinginformalletterswecanmakeuseofapersonaland
emotional tone. The languageand tone of the letterdepends on thelevelof comfortand familiarity
between the sender and the recipient. There is no specific format prescribed for writing informal
letters.
Formal Letters
Formallettersareusedforofficialandprofessionalcommunication.Theyarewrittenwithaparticular,
welldefinedobjectiveorsetofobjectivesinmindandnotforthesakeofarbitrarycorrespondence.
As opposed to informalletters, there is a manner prescribedfor writingformalletters. These letters
areconciseandwritteninaspecificformatusingformallanguage.Thetermformalletterencompasses
anyletterwrittenforaformalpurpose,whetherthatbearecommendationletter,a complaintletter,
ajobapplication,oralettertotheeditor.Formallettersareusedmainlyfortwopurposes.Thefirstis
Chapter-10 : Writing Formal Letters and Official Communication - 371 -
 thattheyopenchannelsforcommunicationwhichwillaidyouinreceivingadesirableresponsewhile
solving a problem, making preparations, and inquiring about products and services. Moreover, they
canbeusedasofficialrecordsofthecommunicationbetweentwoparties,sothatifthereisadispute
orconfusion,youcansupportyourcasewithphysicalproof.
Formalletterscan becategorized intothe following:
(a) Businessorofficialletters(formakingenquiries,registeringcomplaints,askingforandgiving
information,placingorcancellingorders,sendingrepliesinresponsetoenquiriesorcomplaints,
etc.)
(b) Lettershighlightingcivicproblems(lettertotheeditororletterstoconcernedauthoritiesregarding
civic problems)
(c)  Job applications
Q.3. Explainthepointstorememberwhiledraftingformalletters.
I. Usethespecifiedformat
II. Leavealine/additionalspace betweenparagraphs since no indentationis followed.
III. State your reason for writing in your first paragraph. Your objective while composing a formal
lettershouldbetopresentthekeyfactsasquicklyandassimplyasyoucan.
IV. Keepthelanguagesimple.Formaldoesnotmeancomplicated.Usesimplelanguagethatiseasy
toreadandunderstand.
V. Atalltimesadddetailsandinformationthatwillmaketheaddressees(orreceivers)taskeasy.For
example:Ifyouarewritingtoanorganizationtoapplyforajob,mentionthepostyouareapplying
foralongwithyourqualificationsandexperience.Ifyouarewritingtoaservicecentre,mention
specificssuchasmodelnumber,yearofpurchase,invoicenumber,etc.about theproductalong
withadescriptionoftheproblemyouarefacing.
VI. If you wish to make a reference to previous letters or conversations, payments etc., provide
details such as date, invoice number, quotations, cheque numbers, etc.
VII. Alwaysbegentleandcourteouswhiledirectingthereceiver’scourseofaction.
VIII. Donotforgettobepoliteevenifitisacomplaintletteryouarewriting.
IX. Checktoensurethatyourletterisfreefromanymistakes,i.e.grammaticalorspelling.
Q4 Describetheformatofformalletters.
Sender’s Address R27,BlockAGreaterKailasPune56
Date 17May,20XX
Designation/Name of Addressee TheManager/Mr./Ms.
Address of the Addressee ShrishtiEnterprises247,OkhlaIndustrialAreaNewDelhi
25
Salutation Sir/Ma’am
Subject Placing anOrder forOffice Furniture
Content : Introduction ftergoingthroughyourcatalogueofoffice
Body Afurniture,Iwishtoplaceanorderforthefollowing
itemsforouroffice.

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-372 -
 Sr.No. Items Quantity
1 Chairs (Steel) 25Pieces
2 Tables (Wooden) 15Pieces
3 Stool (Wooden) 20Pieces
4 Computer Table 10Pieces
5 Filing Cabinets 05Pieces

Conclusion Alltheitemsshould beasperthespecifications

mentionedinyourquotation.Substandardmaterialwill
bereturned.ThedeliveryshouldbemadebeforeMay
25,20XXfailingwhichtheorderwillstandcancelled.
Pleasesendthe billafterdeductingthe discountas
applicable. Asagreed upon earlier, payment of the bill
willbemadebychequeinfavourofthefirmwithin10
daysafter thedelivery of items.
Complimentary Close Yours truly /Sincerely
Signature Rohan Sinha
Designation of Sender (if applicable) ManagerKD Infotech
Explanationoftheformat:
Sender’s Address
Thesender’scompleteaddressorcontactdetailsmustbeaddedatthetop.Ifyouaremakinguseofthe
letterheadofthecompany,thencontactdetailswill bepresent ontopoftheletter.
Date
Itisimportanttoaddthedatesbecause,ifyouwanttocommunicatefurtherthenaddingthedatecan
makeiteasyforyoukeepatabonyourletters.
Salutation
Thesalutationisanimportantpartoftheletterandmustbeaddedatthebeginning.
• DearSirorMa’am
If you do not know the name of the person you are writing to, use this. However, it is always
advisabletotryandfindoutthenameofthepersonyouarewritingto.
• DearMr.Mudliar
Ifyouknowthename,usethetitle(i.e.Mr.Miss.,Mrs.,Ms,Dr.,etc)alongwiththesurnameonly.
Subject
Thesubjectisenteredimmediatelyafterthesalutation.Itisabriefstatementoftheissueormatter
theletter isrelated to.Itmustattract the attention ofthe receiver and helphim understandquickly
whattheletterisgoingtobeabout.Examples:Placinganorderforlibrarybooks;Applicationforthe
postof AssistantManager; Complaintregardingincorrectbilling;Enquiry aboutexchangepolicy;etc.
Content
a) IntroductionTheintroductoryparagraphofaformallettershouldalwaysbewritteninaconcise
manner.Itshouldquicklyandsimplysummarizethepointthatyouwantthereadertofocusoract
on.Thesooneryoudothis,thebetter.

Chapter-10 : Writing Formal Letters and Official Communication - 373 -

 b) Body–Thebodyofthelettershoulddetailthekeypointsorthemessageyouwanttoconvey.Add
all the required details but don’t exaggerate. Use simple language that is easy to read and
understand.
c) Conclusion–Theconclusionisa declarationofthewriter’spurposeofwriting, expectationsfrom
thereceiver,whathethinksthenextstepshouldbeandfurtheractionsthathemaytake.Moreover,
thewritershouldalwayshopeforapositivereactionorreplyandmustusetermslike‘Thanking
you’, ‘With warm regards’, etc. before signing off.
Examples:
Theconcludinglinesforajobapplicationmaybe:‘Iwillbereadilyavailableforapersonalinteraction
anytimeasperyourconvenience,incasemycandidatureisconsideredfortheaforesaidpost.or
The concluding lines for a letter of complaint may be worded as follows: ‘It is apparent from the
conditionofthemachinethatitisadefectivepiece.Sincethemachineisintheguaranteeperiod,
wouldlikeittobereplacedwithanewone,butofthesamemodelattheearliest.’
Complimentary Close
A complimentarycloseistheterm priortoyoursignatureinaletter.Thissignoff phraseshows your
respect and appreciation for the person who is considering the request in your letter. The following
optionsareallgoodwaystocloseaformalletter:
i. Yours respectfully
ii. Yours sincerely
iii. Yourstruly
iv. With appreciation
v. With sincere appreciation
vi. With sincere thanks
Q5 GivedetailsaboutthelettersofEnquiry.
Aletterofenquiryisoneofthemostimportanttypesofbusinessletters.Theselettersarewrittento
gather information from various sources about people seeking jobs, prices of services and products,
etc. They help the receiver decide whether they should give jobs and promotions, grant credits or
enter into contracts. They may also be written to third parties asking for information about jobs or
about organizations wishing to build a business relationship.
Whenwriting aletter ofenquiry, youshould:
•Giveabriefintroductionaboutyourselfwiththenameofyourorganization.
•Providethedetailsaboutthesubjectofinquiry.
•Presentqueriesinbulletpointsifyourequirealotofinformation.
•Mentionthedeadlinebywhenyourequiretheinformation.
Q6 Writeanenquiryletteraboutcateringservices.
Zest Designs
F671,AHBlock
Jangpura
NewDelhi18
29October,20XXProprietor
Creative Catering

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-374 -
 59,KailashColony
New Delhi 32
DearMr.Khan

Subject:Enquiryaboutcateringservices

WithreferencetoyouradvertisementdatedOctober20,20XX,wewishtoenquireaboutyourcatering
services.Ourorganizationiscelebratingits50thfoundationanniversaryinthecomingmonthandwe
arelookingforsomebodywhowould caterforourcelebrationdinner.
Weareexpectingatleast500guestsandemployeesduringthesaidevent.Itwillbeaformaleventand
we willneed fullcatering servicesthat include severalcourses, desserts,and waitersand hosts.

Kindly provide us with details about the following:

• Whetheryourcateringservicehastheabilitytohandlealavishcelebrationwithalargeaudience
suchasours.
• Whetherwaitersandhostsareprovidedbyyou
• Offers and discounts available
• Themenuoptionsandcharges
• If there are any additional charges levied forlinens, centerpieces,etc.
We shall be grateful if you could furnish the above mentioneddetails along with your quotations as
soon as possible.
Thankyou
Yours sincerely
Ms.SadhnaKakkar
Administrator
Zest Designs
Q7 GivedetailsaboutOrderLetters.
Anorderletteriswrittenbyabuyertothesellerrequestinghimtodelivergoods.Theselettersinclude
three majortypes of information.
1. Details about the item or product being ordered: Complete information and specifications of the
goods ordered must beprovidedin an order letter. Suchinformation includesthefollowings:
• Nameofproduct
• Nameofbrand
• Unitprice
• Quantity
• Otherspecifications(suchascatalog number,modelnumber,color,size,weightetc.)if required.
2. Information relating to shipping: In absence of shipping information, misunderstanding can arise
between buyer and seller. Shipping information may include the followings:
• Desired receipt date
• Desired shipping location

Chapter-10 : Writing Formal Letters and Official Communication - 375 -

 •Modeofshipping(rail,road,orwaterways)
3. Information relating to payment: Mode of payment must be clearly indicated. The seller will accept
theorderletteronlywhenbothagreetothetermsandconditionsofpayment.Paymentinformation
includes the following:
•Modeofpayment(cash,cheque,draft)
•Paymentdate
Q8 Writealetterplacingorderforsportsequipment.
APS School
Kochi
12June20XX

BestSports&Co.
21,MallRoad
Chennai12
Subject:Placinganorderforsportsequipment
DearSir
As discussed telephonically, we wish to place a bulk order for the supply of the following sports
equipments for our school.
S.No. ITEM QUANTITY SPECIFICATIONS
1. Basket ball 1dozen Cosco,No.6
2. Football 1dozen Cosco,No.18
3. Badmintonnet 4 units Nivea
4. Hockeystick 1dozen AlfaHockey
5. Badmintonracket 2dozen Carltongpx–11
6. Cricketsets 5sets GMapex
Theabovementionedequipmentshouldreachuslatestby15July20XX.Youarerequestedtoensure
that high quality products are supplied. The initial upfront payment of 20% is enclosed (cheque
no.124321foranamountRs.15,000/).Asdiscussedtelephonically,thebalancepaymentwillbemade
atthetimeofdeliveryintheformofademanddraftafteradjustingtheapplicablediscount.
An early delivery wouldbe appreciated.
Yours sincerely
John Mathews.
(Principal)
Q9 Givedetailsoflettersofcomplaint.
In the business world,  where selling and providing services to fulfill needs of customers plays an
important role, there will also be scope for complaints raised by customers  due several reasons. A
letterofcomplaintletterenablesustonotifyanindividual,companyorbusinessthatwearedissatisfied
with a product purchased or a service received from them. A complaint letter can be written in an
individualcapacityoronbehalfofacompany.Writingacompliantletterisaneffectiveandprofessional
waytogettheproblemsresolved.
While writing aletterofcomplaint, youshould:
• Giveaclearanddetaileddescriptionoftheproblemyouarefacingandwhatyouwantdone(i.e.
the outcome).

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-376 -
 • Includeimportantdates.Itisimperativethatyoumentionthedateonwhichyouplacedanorder,
purchased the goods or services and when the problem occurred. If you are following up on a
previouscomplaintthat you made,youmayevenneed toincludethedateon whichyoumade
the first complaint.
• Givedetailsofwhatactionyouhavetakenuptillnowtosolvetheproblemandwhatyouplanto
doiftheproblemisnotresolved.
• Askforaresponse.Givethesellerareasonabletimelimittorespondtoyourrequest,butstate
withclaritythatyouexpectaresponsefromthem.
• Attachacopyofanysupportingrelevantdocumentationsuchasareceiptorinvoice.
• Never make personal accusations/allegations.
• Avoid discussing any other concern besides the complaint issue.
Q10 Writeacomplainletteragainsttheundeliveredorder.
XYZ Corporation,
Rajeev Chowk Delhi
15December,20XX
TheGeneralManager
Sales and Purchase Division
ABCElectronicsBaileyRoadGhaziabad
DearSir/Madam
Subject:Complaintagainsttheorderno.S/N115
ThisiswithreferencetoOrderno.S/N115madeonDecember1,20XX.Theordercomprisedsix2tons
splitairconditionersofXXXbrandandfour1.5tonswindowairconditionersofXYZbrand.Asperthe
agreement,theproductsweretobedeliveredwithintendaysoforderandarepresentativewastobe
sent for installation and demo. Unfortunately, only half the order has been delivered and no
representative has visited for installation or demo.
Thefactthatyouhavetakenunduetimeandhavenotyetdeliveredtheorder,hascausedusgreat
embarrassment and inconvenienced our clients. In addition we have received no correspondence
from your side explainingthe delay.
Kindly ensure that the remaining items of the order are delivered to us before December 20, 20XX
failingwhich payment will be stopped or the order cancelled.
Isincerelyrequestyoutolookintothematteranddotheneedfulassoonaspossible.
ThanksandRegards.
Ashita Bhargava
Sr.Manager
Operations and Admin Department
Q11 Givedetailsabouthowtoreplytoletterofcomplaint.
Thewayafirm/businessrespondstocomplaintsandunhappycustomersimpactsitsreputationmore
than most other things. Customer service has always been an important part of developing brand
loyalty.Withtheincreasingcompetitioninthemarket,it’sbecomingevenmorecriticalforcompanies
toprovidegreatcustomerservice.
Whilerespondingtocomplaintsmadebycustomers,itisimportantthatyou:
1. Address clearlyand specifically theproblems andissues broughtupby the customer.
2. Acknowledgeandapologiseforanyerrorthatoccurredonyourend.

Chapter-10 : Writing Formal Letters and Official Communication - 377 -

 3. Explain to the customer exactly what you plan to do or may have already done to resolve the
problem.
4. Assurethecustomerthathewillneverexperiencesuchproblemsinthefutureandproposehow
you will improve his experience.
Customersdonotacceptvagueresponsestotheircomplaints.Youmayevenloseclientsorcustomers
iftheyfeelthattheircomplaintsarebeingbrushedoff;therefore,itisofextremeimportancethatyou
arevery specificandclearwhile respondingtoletters ofcomplaint.

Q12 WriteaReplytoLetterofComplaint.
ABC Electronics
Bailey Road Ghaziabad
16December,20XX

Sr.Manager
Operations and Admin Department
XYZ Corporation
Rajeev Chowk
Delhi

Dear
Ms.Bhargava
Subject:Replytocomplaintagainstorderno.S/N115
Thisisinregardtoyourorderno.S/N115whichyouplacedwithourcompanyonDecember1,20XX.
The order comprised six 2 tonne split airconditioners of XXX brand and four 1.5 tonne window air
conditionersof XYZ brand.
We sincerely apologize to you for the delay in delivery of the products you ordered with us. Due to
problems with supply from the manufacturers’ end, this inconvenience has beencaused to you. We
arealsoflooded with alargenumberofunexpectedordersthismonth leadingtothisdelay.
Wearetryingourbesttominimizethedelayasmuchaspossibletoreduceyourtrouble.Wepromise
thatyourshipmentwillbedeliveredbeforeDecember20,20XX.
Youhavebeenaloyalandsupportiveclientofourcompanyforyears,andwearegratefultoyou.Asa
small tokenof honorandasa mark ofapology weoffer 10%discounttoyou on yournext purchase
order withus.Wheneveryouplaceyournextorderwithourcompany,youcanavailthisdiscount on
the final bill value.
Toensurethata similarproblemdoesnot occurin the futureagain, we havetaken all precautionary
steps.Onceagainweapologizetoyoufortheinconveniencecausedtoyou.Wewouldappreciateyour
supportonthismatter.
Thankyou.
Yours sincerely,
Siddhartha Sapra
General Manager
Sales and Purchase Division

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-378 -
Q13 GivedetailsofPromotionLetters.
Promotionalcontentreferstoletterswrittentocustomersprimarilytoacquaintthemofsomenew
development, like opening  of a new branch, offers and deals extended to them or  new facilities
available.Theymayevenbeusedtoinformcustomersofnewschemesorupgradationfromanormal
to a privileged category, or to offer promotional discounts.
How to write promotional content
•AdheretobusinessEnglish.
•Avoidfancyjargon.
•Textshouldbetothepointanddiscussonlypromotions.
•Personaltopicsshouldnotbeincluded.
•Subjectshouldbeclearandprecise.
Q14 Write a letter to promote a new branch of the business.
XYZBank
56 Videocon Towers
PrashantLokMumbai2
10December,20XX

Chief Finance Officer

Arihant Corporation Ltd
Sarojini Nagar
Delhi38

DearSir

Subject:NewbranchatXYZNagar
Wearehappytoannouncethegrandopeningofourbank’s100thbranchinXYZNagar,NewDelhi.
Asaprivilegedcustomer,wearepleasedtoofferyouextrabenefitsforanaccountopeninginthenew
branch.
The new branch has three ATM machines and locker facility. In lieu of our long term association, we
would notchargeyouanyfeesfor locker facility.
Kindly visit the branch. Contactdetails are given below:
87,XYZNagar
Just2kmfrommain
busstop.
Ph:01125590000
Yours sincerely, SudhirKumar (BranchManager)
Q15 GivedetailsabouttheSalesLetters.
Sales letters are an important means of business communication and are written to publicize and
ultimatelysellaproductoraservicetotheconsumers.
Benefits of Sales Letters
•Helpinsalespromotion

Chapter-10 : Writing Formal Letters and Official Communication - 379 -

 •Helpinpresentingintroductoryoffers
•Strengthenbusinessventuresandpartnerships
•Highlighttheimportanceofcustomers
•Makesiteasytounderstandfactsandfigures
Tips to Write Sales letter
I. Useformal language; spoken English and slangs should be avoided
II. Salutations should be business like
III. Content should be sales specific
IV. Extra details/information should not be included
V. Personalized comments should not be included
VI. Keepthingsshortandcrisp
VII. Fora newproductlaunch, mentionits features,uses,benefits
VIII. Payattentiontothetargetaudience,eachlettermightneedadifferentphrasing
Q16 WriteaSalesLetter.
Kalu Sarai,
New Delhi
10December,20XX

Mr.Akbar
Director, Sales and Marketing
XYZ Corporation

DearSir,
Iwouldliketotaketheopportunitytothankyouforyourbusinesswithourorganization.Ithasalways
beena pleasureworking withyou.
I would like to inform you that the 1800 units of machinery ordered, will be delivered as per the
mutuallydecideddate.Inaddition,ourexpertswouldcometoinstallthemachineryandgiveadetailed
demo ofitsworking. Wewould also provide afree service forthe next twoyears, takingcare of any
wearandtearorproductdamage.Theproducthastwoyearwarrantyperiod.
For any other query regarding the machinery ordered and its functioning, please feelto contact me.
Wewouldbehappytoserveyouattheearliest.
Thanking you.
Yours Sincerely
Mr.Khan,

Sr.Manager,
Sales and Marketing,
DrivePvt.Ltd.
Ph:123456789

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-380-
Q17 GivedetailsabouttheRecoveryLetters.
Recoverylettersareaddressedtocustomersorclientsfromwhommoneyneedstobecollectedforthe
goods or services provided to them. The intent behind writing such letters is to ‘recover’ money
withoutannoyingoralienatingthecustomers.Suchaletterwillincludedetailedinformationregarding
theamountofoutstandingpaymentandthelastdateforthepaymentoftheoutstandingamount.It
mustalsodetailthelegalaction thatcould betakenintheevent offurtherdelayornonpaymentof
dues.Onemustrememberthatthelanguageusedwhilewritingrecoverylettersmustbepolite,soas
nottooffendthecustomerandtoensurethatfuturetransactionswithhimarenotadverselyaffected.
Tips to Write Recovery Letters
I. Usepolite language, asina gentlereminder.
II. Accusatoryorthreateninglanguageshouldbeused onlywhenthingsarebeyondcontrol.

III. Satethelegalactionthatcouldpossiblybetaken.
IV. Donotuseofficialrecoveryletterstoventoutpersonalenmityorhatred.
V. Keep the language formal and business oriented.
Q18 Writealettertorecoverthependingdues.
XYZBank
PP Towers
Tirumalai
Tamil Nadu
30June,20XXManager,
Tirumala Corporation
Tirumalai, Tamil Nadu

DearMrs.VedLakshmi,
SUBJECT: Pending dues

ThisletterisagentlereminderforthepaybackoftheloanamountofRs4croresthatyourcompanyhas
takenfromourbankinJunelastyear.Aspertheloanguidelines,oncompletionoftwelvemonthsyou
wouldneedtopaybacktheloanwithappropriateinterest.Asthepaymentisduesincelong,wewould
appreciate if you send the cheque immediately.
Irequestyoutokindlydotheneedfulwithinthenextsixworkingdays,failingwhichstrictlegalaction
will be taken.
Kindly acknowledge the receipt of this letter.
ThankingYou
Yours Sincerely

Mr.AnilJain
Manager

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Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-384 -
UNIT2

OFFICIALCOMMUNICATION

INTRODUCTION

Sinceeveryorganizationwhetheritisahugeconglomerateorasmallbusinessisdividedintovariousdepart
ments,usingaformofinternalcommunicationbecomesmandatory.Interdepartmentalandintradepartmental
communicationanimportantaspectofbothbusinessandofficialcommunication.Officialcommunicationcan
be segregated into memorandums, official circulars and office suggestion boxes.
CIRCULARS
Officecircularsaregenerallythoseletterswhicharecirculatedtoahugenumberofemployersinanofficeina
simultaneousmanner,conveyingaspecialmessageoraninstructionthatneedstobefollowedinthefuture.It
isauserfriendlyandacosteffectivemethodofcirculatinginformationbyensuringthattheparticularmessage
reachesmanypersonsatthesametime.Thesetypesoflettersprimarilyfocusonthebusinessissuesandhold
a certain degree of importance amongst the employers in an office. The information conveyed through a
circularmayvaryanywherefromaninvitationtoameetingtotheimportantissueslikeimpendingmeetings,
newrulesthataregoingtocropupintheimmediatefuture.Thismethodisseenasaneffectivemethodof
communicationasitdisseminatesanissuetoahugenumberofpeople.Itisanindispensabletoolwhichisboth
cost effective and formaland which reducesthe effort of a management considerably.
Sample
CircularNo.XXI 7th December,
2016
Officeworkinghours
For all employees
This is an official confirmation about the office timings that have to be followed strictly by all the
employees. Being an outsourcing organization, we maintain a different pattern of work hours as
compared to the normal. It is a sincere request to all employees to follow work timings as per the
mentioned guidelines, catering to the US work time.
•Workinghour6pmto2am.
•SaturdayandSundayoff.
•Mealbreakfrom9:00amto9:30am.
Defaulters will be punished and strict action will be taken against repeated defaulters. In case of
emergency or any otherexigency, kindly notify therespected Headsin advance.
Simran Thalreja
Manager
Memo
Chapter-10 : Writing Formal Letters and Official Communication - 385 -
 Amemoisusedasameansofofficialcommunicationwithinacompanyoranorganization.Theword
memo or memorandum means ‘reminder’ and is frequently used to inform the people within the
organization about policies, procedures, etc. It is often written from a onetoall perspective (like
masscommunication),broadcastingamessagetoanaudience,ratherthanaoneonone,interpersonal
communication.Itmayalsobeusedtoupdateateamonactivitiesforagivenproject,ortoinforma
specificgroupwithinacompanyofanevent,action,orobservance.
A memo typically hasfive functions:
•Toremind
•Tohighlight
•Torecount
•Tokeeparecord
•Toinformorinstructbriefly
Inalltheabovescenarios,memosshoulduseaneasylanguage,withshortandcrispstatements.
Sample1
(AmemoletterinformingtheofficeManageraboutthepurchaseofocefurniture.)
ABC Technopolis Ltd.
65,NehruNagar, NewDelhi
Interoffice memo
Date:25July,2016
To:OfficeManager
From:Mr.AshokReddy,PurchaseOfficer
Reference:216/BM
Subject:PurchaseofOfficefurniture
As desired,the orderfor the supply ofoffice furniture (chairs andtables, sofa sets) hasbeen placed
withShivshaktiFurnitureMart,Kirbiplace,NewDelhi.Thechairsandtableswillbesuppliedinmultiple
lots.Theorderwillbecompletedintendays.
Sample2
(A memo  letter  apprising  the  employees  of all branches  about  the  suspension order  of an
employee of the same office.)
Samriddhi Bank Limited
29Kapasehra,Gurgaon,Haryana

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 InterOfficeMemo

Date:05September,2016
To:AllBranchManagers
From:Mr.NareshKochar,GeneralManager
Reference:114/LT
Subject:AppraisalofCashier’sDismissal

ThisistoinformyouallthatMr.XYZ,CashierofSamriddhiBank,VilasNagarBranch,hasbeensuspended
oncharge of misappropriation offund.Allconcernedare requestedtoabstainfromtransactionwith
him.Thebankauthoritieswillnotberesponsibleforanysortofmishap.
Summary
Thesectiondiscussesthevariousformalstylesofletter writing,including,circular,memos,complaint
lettersandrecoveryletters.Allthesewrittenstylesneedtofollowacertainformatastheyareissued
inthecompany’sname.
Moreover, the language used, the diction and the tone is different for each style of writing. Special
attention should be paid on style and tone while drafting office letters. There should not be any
personal remarks or prejudice while writing formal letters. In addition to this, the letters must be
circulated/ dispatched well in time to avoid unnecessary delays.

Chapter-10 : Writing Formal Letters and Official Communication - 387 -

 (UNITI&UNITII)

CLASSWORK

Q1 You are the Sale Head of your company OverseasInternational . You had dispatched a hundred
importantletterstoyourbranchofficesusingtheservicesofacouriercompanynamedCourierandCo.

As committed,thecouriercompanyfailedtodeliverthelettersontimeduetowhichyourcompany
hassuffered losses. Draftacomplaint letter forthe same, addressingit tothe Director,
DispatchandDelivery,ofCourierandCo.

Q2 ImagineyourselfastheSr.Manager,ofacompanycalledDirectSolutionsOneofyourclientshad
orderedfew softwareproducts,whichyouhavedelivered.However,onlyhalfthepaymenthasbeen
received.Inspiteofrepeatedemailsandphonecalls,theclienthasnotclearedthependingpayment.

Draft a recovery letter for the same, referring to dire consequences that could be taken in case of
unfulfilled payment.

Q3 Asthe HR,headofyourcompany,drafta circular,tobedistributedtoallemployeesinformingthem

aboutcertainchangesindresscode.Alsomentionthatthesechangeshavebeenundertakenkeeping
in mind the benefit of female employees, to avoid unwanted situations.

Q4 DraftamemoforaCAfirm,quotingtheamounttobespentonstationaryandoffice supplies for

thefirstquarterofthefinancialyear.

Q5  Imagine yourself as the Manager,Keller Kitchen Company. Write a letter to Tajmeet Sethi,Proprietor
ofManjeetKitchenEquipment,orderingvariouskitchenequipmentforyournewlyopenedrestaurant.
Specify all the necessary details.

Q6  As the Office Manager of A.Q.Electronics Ltd., write a letter to the Sales Manager, Standard Office
Furniture Limited enquiring about their range of visible record system ling cabinets that you are
interested in introducingin your main office. Also request price listsand catalogues.

Q7 Green CleanLtd.isafirm providingitscustomershomecleaningservices.As Suheil Tandon,

Managerofthefirm,writeasalesletteraddressedtoAanyaAiyerdescribingyourstateof–the–artand
environment friendly cleaning methods. Detail why you have an edge over firms providing similar
services.Alsoprovideinformationaboutanydiscountsoroffersyoumaybeextendingtoyourcustomers

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-388-
 HOMEWORK1
Q1 As the HR Head of your company,draft a circular to all the employees about new leave policyto be
implemented from the next calendar year.
Q2 Asthemanagerofastationerycompany,draftaletterforrecoverytooneoftheclientswhohavenot
paid in sixmonths.
Q3 AsanHRmanagerofthefirm,draftaletterofcomplainttothesupplieroffansforundeliveredorder.

HOMEWORK2
Q1 AstheManager,SupplyChainDivision,ofanFMCGcompanywriteanenquirylettertoyourcounterpart
ofanOil Manufacturingcompany,statingyourqueriesregardingoilpricesatbulkrate.
Q2 AstheManager,HRofNetSolutionsLtd,Mumbai,draftacomplaintlettertotheAdministrationHead
ofFoodforyouSolutions,Mumbai,statingyourconcernaboutthebadqualityoffoodbeingsupplied
to your company’s cafeteria.
Q3 AstheHRManagerofyourorganization,draftacircularforalltheemployeesofyourcompany,informing
themaboutacharityculturaleventbeingorganizedovertheweekendintheofficecampus.Mention
a fewevents andrequestforactiveparticipation.
Q4 Write a circular addressing to the employees regarding reorganization of manpower and their
responsibility in finance department of the company. [Sugg.Nov18,5Marks]
Q5 Write circular addressing to the employees regarding office timings. [Sugg.May18,5Marks]
Q6 Write a memo letter informing the employees of all branches about the suspension order of Mr. Z,
cashier,onchargeofmisappropriationof fundofthesameoffice. [Sugg.May18,5Marks]
Q7 Writealettertoabankrequestingthemtostoppaymentofachequewhichhasbeenreportedlost.
[Sugg.Nov19,4Marks]
Q8 Draft a Circular informing the staff about the dismissal of the Sales Head on being proved guilty of
charges of misappropriationof funds/accounts. [MTPApril19,5Marks]
Q9 AstheManager,HRofNetSolutionsLtd,Mumbai,draftacomplaintlettertotheAdministrationHead
ofFoodforyouSolutions,Mumbai,statingyourconcernaboutthebadqualityoffoodbeingsupplied
to your company’s cafeteria. [MTPApril19,5Marks]
Q10 Draft a formal letter, as Head of the purchase, write a complaint letter to the xyz company for zyx
product. [MTPOct195Marks]
Q11 You are a manager in a firm called YourOwn Office Supplies Ltd. dealingwith office supplies.Draft a
formalletterto yourclientapologizingforthedelayinshippingitsorderduetounforeseenreasons.
[MTPAug18,5Marks]
Q12 WritealetterfromXYZGroupforenquiryaboutthecateringservices. [RTPMay20]
Q13 WritealetterofpromotionforopeningnewbranchoftheXYZBank. [RTPMay20]

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 CHAPTER11
WRITINGFORMALMAILS

INTRODUCTION
 Therehasarevolutioninthemannerandmethodofcommunicationinthelastfewdecades.
 Theinternet hasmadeinstantaneouscommunication apartofeverydaylife.
 Writingandpostinglettersisnolongeraviableoption.
 Themostcommonandpreferredmethodofinformalandformalcommunicationin themodernworld,
istheEmail(electronicmail).Anemailcanbeusedasaninterofficeorinternalwrittencommunication
tooloritcanbesenttosomeoneoutsidethecompanyorinstitution
 However, there are differences in language and style used in an informal, semi formal and formal
mail.
Q1 What is ECorrespondence?
Ans. ECorrespondenceiscommonlyknownas‘emailcorrespondence’or‘electroniccorrespondence’.
Itisanelectronicmethodofprovidingyouwithimportantinformationonyouremailaddress.You
must supply a valid email address in order to receive information via email. For example:
[email protected].
Q2 Whatarevariouskindsofmails?
Ans.
1. Informalmails:
x Theyaresenttofriendsandrelatives.
x Therearenorulestobefollowed.
x Youcanusea casual/informal language(slangs/ abbreviationscan beused).
x Noparticularstyleofwritingisrequiredtobefollowed.However,thepurposeofthemailandmessage
shouldbecleartotherecipient.
2. SemiFormal mails:
x These are addressed to colleagues functioning within a team and at the same seniority level.
x TheEmailcanbebriefandthelanguagecanbecasualandfriendly.Butmaintaining decorumisessential
andthepurposeofthemailandmessageshouldbecleartotherecipient/recipients.
3. Formalmails:
x They are addressed to people within and outside the organisation.
x Therefore,thestyle andlanguageshould beformal,thepurposeclearandcontentlucidandprecise.

Chapter-11 : Writing Formal Mails - 393 -

 Followalletiquettesofformalcommunication
Asampleemailscreenisshownbelow

Format:
From:Nameofpersonsendingthemail.
To: Name of recipient
Cc: Carbon copythe same mail being sent to other individuals with their email Ids visible to all in the group
Bcc: Blank carbon copy – the names and email IDs of the Bcc receivers is not visible to the recipient of the mail,
but his/her ID is visible to the Bcc receivers.
Subject: state it clearly and concisely
Salutation: Dear Sir/ Madam/ Dear Mr. Gupta/ Hi Kapil (if you know the receiver well), Hi all (if addressed to
a group of people)
Main body: contains main content of the mail
a) Openingparagraphshouldoutlinethemainidea/reasonforthemail
b) Following paragraphs give relevant details.

Closing: make a concluding statement/ suggestion

a) Recommendations toaddress the issueor problem

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-394 -
 b) Suggestionsonthetimelineforresolvingtheissueanddelegatingresponsibilitytoselectedindividuals.
Attachments:givealistofdocumentsattached

SignatureLine:includessignature,nameanddesignationofsender.Itmayincludeemailaddress
andtelephone numberforconvenienceofrecipient.
Q3 Howtowriteaneffectiveandappropriateemail?
Ans. Writingan effectiveand anappropriate Emailrequires thefollowing
1. BeclearaboutthepurposeofwritingtheEmail.
2. Makepointsaboutinformationthatneedstobeincludedinit.
3. Yourtoneandlanguageshouldbesuitablefortheintendedrecipients.
4. Useyourofficialidforallworkrelatedmails.
5. Useanappropriatesalutation.
6. Keepthemailshortandsimple.Nobodyhasthetimetoreadlengthy,confusingandcomplicated mails
7. Useshortsentencestoconvey yourmessageclearlyand concisely.
8. Statethesubject/mainpurposeofwritingthemailclearlyintheopeningparagraph.
9. Useseparateparagraphsforstatingdifferentpoints.
10. Includepiecharts,graphs,owchartsetc.topresentinformationandbringluciditytothecontentof
your mail.
11. Thecontentofthemailshouldbelogicallyandsystematicallyorganized.
12. Donotwritetheentiremailincapitalletters.Itislikeshoutingatthetopofyourvoice.Capitalletters
can be utilized to highlight certain points but should be used judiciously.
13. Highlight/underlinethekeypointssothatthereadercanskimthroughthemailandgetanideaof the
content.
14. Takespecialcareofthetoneofthemail.Sinceallyouwritegoesonrecord,makesurethatyourtone
ispleasantandreflectstrulywhatyouwishtostate.
15. Ensureyouarepoliteatalltimeswhatevertheprovocation.
16. Proofreadyourmailbeforeyousendit.Checkforgrammatical,spellingandpunctuationerrors.Amail
fulloferrorsitcommunicatesthatyouaresloppyorthatyoudonotpayattentiontodetail.Besides,
errorsmaychangethemeaningofthemail.
17. Whenframingareplytoareceivedmail,ensureyouanswerthequeriesorrequestsinit.
18. Do not use slang, incomprehensible abbreviations and SMS language in your mails. They make it
difficulttofollowandgivetheimpressiontothereaderthatyouaretoocasualinyourapproach.

Q4 Whenareemailseffectivewayofcommunication?
Ans. Emailsareeffectivemeansofcommunicationwhen:
1. Youneedtosendinformationto,orcontactalargegroupofpeople.
2. Youwishtosendsomeoneanelectronic,bulkydocumentsordetailedinformationaboutanyproject/
course/ product.
3. Italsomakesiteasiertocontactpeoplewhoareotherwisenotapproachableduetodistances,busy
schedules, differing time zones etc.

Chapter-11 : Writing Formal Mails - 395 -

 4. Yourequiredaily communicationonvariedmattersinan organization.
5. Youneedawrittenrecordofthecommunication.Itisimperativethatimportantemailsaresavedfor
reference to what someone said in an earlier message, to provide proof (for example, proof that you
havesenttheJeansconsignmentandhavereceivedaconfomationofthesame),orreviewthecontent
of an important meeting, deadline, memo.
Q5 Whenareemailsinappropriatemeansofcommunication?
Ans. Emailsare inappropriatemeansof communicationwhen:
1. Iftheissueiscomplicatedandinvolvesrepeatedlengthydiscussions,itisbettertoarrangeameeting
withthe concerned person/ party.
2. Theinformationisconfidentialandofsensitivenature.Yourmailcanbeforwardedtootherswithout
yourknowledge.Allyourelectroniccommunicationisstoredintheserverevenafteryouhavedeleted
it.Thiscanbeaccessedandmisusedbyanyone.
3. Donotwriteamailwhenyouareemotional—distressed,upset,overjoyedorexcitedaboutsomething.
You may use words which can alter the tone of the message and this can be misunderstood by the
recipient.Besides,donotwriteanythinginamailwhichyoucannotsaytoapersoninafacetoface
conversation.
 SampleMails:
Thefollowingaresomeexamplesofinformal,semiformalandformalmails.
1. .AmitSuri,hasrecentlybeenpromotedtothepostofSeniorManagerinHindalcoIndustries.He
receivesacongratulatorymailfromhissister,hiscolleagueandhisGeneralManager.
INFORMAL MAILSAMPLE
a) To:AmitSuri
CC/BCC:
Subject:CONGRATULATIONS!!
HiAmit,
WejustgottheSUPERnewsofyourpromotion.Iamsoooexcitedandthrilled.Abigpartyisdue
fromyouand,ofcourse,giftsforyourlovingsis.
MomandDadtooareoverjoyed.Theyareveryproudtheirhardworkingson.Theysendyoutheir
loveandblessings.
Wearealllookingforwardtoyourvisithomesothatwecanhaveagrandcelebratoryparty.
Yours affectionately,
Jyoti
SEMIFORMALMAIL
b) To:AmitSuri
CC/BCC:
Subject:CongratulationsonYourPromotion
Hi Amit,
I just got to hear of your promotion to the post of Senior Manager. Please accept my heartiest
congratulations.

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-396-
 Your hard work and dedication have been rewarded. You surely deserve the recognition and
responsibilityoftheposition.Allteammembersareelatedthatyouhavebeenselectedfromourteam
(outofthemembersoftenteams.)
Wearesurelylookingforwardtoapartyfromyouatyourearliestconvenience.
Regards,
Sumit Choudhary
(Team member)
FORMALMAIL
c) To:AmitSuri
CC/BCC:
Subject:PromotiontothePostofSeniorManagerDearAmitSuri,
I am pleased to apprise you of your promotion to the post of a Senior Manager in the Production
Department.
YouhavebeenwithHindalcoIndustriesforthepastsevenyearsandhaveprovedyourworthtimeand
again.Your dedication, hard work and willingness to takeon new initiativeshasbeen recognized and
appreciated by your seniors
You have implemented procedures which have improved efficiency in your department and been
recognized for outstanding achievement.
Pleaseacceptmycongratulationsonyourpromotion.
Regards,
Prateek Chopra
General Manager
Hindalco Industries
 Differencebetweenawellwrittenandpoorlystructuredmail
Version1ofSudhaKumari’sEmail
Subject: tomorrow
Asyouknow,tomorrowafternoonwe’llaremeetingtodiscussthestatusofallthenewassignments
wearepreparingforthestudentsforthecomingsession.Teawillbeprovided.Besuretoarriveon
timeandbringalongtheassignmentsyouhavebeenworkingon—bringplentycopiesforeveryone.
Bringeverythingyouhavebeenworkingonyourcalendars,reports,andanyimportantemails
youhavesent.Also,IwantedtoremindyouthatyourmaterialhastobegiventoMs.Ridhimaat
thereception.Ifsheisnotatherdeskwhenyoustopby,youcanemailthemtoherlater.
ThanksandRegards,
SudhaKumari
AcademicConvener
Version2ofSudhaKumari’sEmail:
Subject:MaterialsrequiredforWed.staffmeeting
Hi,everyone—
Fortomorrow’s3p.m.stameetingintheconferenceroom,pleasebringcopiesofthefollowing
materials:

Chapter-11 : Writing Formal Mails - 397 -

 • Theassignmentsyou have preparedtillnow
• Aonepagereportdescribingyourprogresssofar
• Alistofgoalsforthenextmonth
• Copiesofanymessagesyouhavesenttoteammembersthispastmonth
You arealsorequested tosubmit the nalisedassignments for printingto Ms.Ridhimaat the
reception.
Ifyoudonotfindheratherdesk,pleaseemailthemtoherlater.
Seeyoutomorrow—
ThanksandRegards,
SudhaKumari
AcademicConvener
Commentsontwomails:
Firstmail:
1. Thefirstmailisconfusing,poorlystructuredandworded.
2. Itisnotaddressedtoanyone.
3. Subjectisvague.Itdoesnotgiveacluetothecontentsofthemail.
4. Timeand placeof meeting isnot mentioned.
5. Itisasingleparagraphwithtoomuchinformationthatisrandomlyputintea,assignments,reports,
mails etc.
6. Thereaderhastoreadthemailverycarefullytounderstandthemessage.
Secondmail
1. Politely addressed to all recipients.
2. StatesthesubjectclearlyyouknowitisaboutmaterialrequiredforWednesday’sstameeting.
3. Time and place of meeting clearly mentioned.
4. Lists material required in bullet points.
5. MakesaseparateparagraphforsubmittingassignmentstoMs.Ridhima.

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-398-
 CLASSWORK

Q1 You are Mr. Pradeep Kumar, General Manager, Surbhi Furnishings. You provide furniture and other
furnishings to large businesses. Write a mail to Mr. Naveen Bansal, proprietor, ‘Chelsea’ chain of
restaurantsoeringyourlatestrangeofproductsatadiscountedpriceinabout150200words.
Q2 Write a mail to Mr. Santosh Desai responding to his query about the availability of cosmetics and
toiletriesinyourmanufacturingunit‘ShimmerandShine’.YouareMr.ManoharSingh,marketinghead
ofthecompany.(wordlimit:150200words)
Q3 WriteamailtoMs.ShikhaSharma,remindingherofabusinesscontractyouhavesenttoherregarding
providing infrastructure maintenance services to her company ‘ Global Solutions’. You are Mr. Sanjay
Johri,Business Headof BloomsburyInfrastructures.(word limit:150200 words)
Q4 You are Amar Singh, a team lead in project implementations department of Cellular
Telecommunications.Writeamailtoallmembersofyourteamaskingthemtoattendameetingafter
twodays,seekingtheirsuggestionsonwaysandmeanstospeeduptheimplementationoftheproject
ofimprovingconnectivityinX,Y,Zareas.Inthecity.(wordlimit:150200words).

HOME WORK1

Q1 DraftaformalEmailtoyourseniormanagerinvitinghimforyourmarriage?
Q2 DraftainformalEmailtoyourbestfriendcongratulatinghimonwinningBestAuthorAward?
Q3 DraftanEmailtoyourJuniororderinghimtohepunctualinoffice?

HOME WORK2

Q1 Youhaveopenedanewcateringcompanysupplyingfoodandsnacks.Astheowner,writeamailtoan
organization,tellingaboutyourservices.YouwouldbeinterestedinsupplyingFoodandBeverage to
theiremployees,aspartofaregulartiffinsystem.Mention pricesand othernecessarydetails.
Q2 On behalf of your CAfirm, write a formal mail to all your clients requesting them to provide all the
necessaryinformation,neededforefillingofITreturns.Statethatdetailsshouldbesentwellintime,
beforethelastdatei.e.31stJuly,2018.
Q3 WriteaFormalEMail:MailiswrittenbytheManagertotheemployeesaboutthechangeddresscode
forRepublic day function including time and venueof function. [Sugg.May19,4Marks]
Q4 WriteamailtoAbhishekMittal,congratulatinghimforthepromotionasamarketingmanagerinthe
organisation.YouareMr.AlokPrakash,manageroftheITdepartment.(wordlimit:150200)

[RTPMay20]

Q5 WriteamailtoMs.RakhiMandal,remindingherofabusinesscontractyouhavesenttoherregarding
providinginfrastructure maintenanceservicesto hercompany‘Manet Solutions’.Youare Mr.Santosh
Gupta,BusinessHeadofJPInfrastructures.(wordlimit:150200) [RTPMay20]

‰
Chapter-11 : Writing Formal Mails - 399 -
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Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-402-
 CHAPTER12
RESUMEWRITING

INTRODUCTION
Personnel department deals with all matters relating to staffing right, from recruitment to retrenchment.
Youstartlookingforajobassoonasyouareoutofcollege.Therefore,amongallkindcommunicationyou
willeverhave,probablytheresumeandapplication letterwillbethemostimportantforyou.
Q1 WhatisaRESUME?
A resume (pronouncedas rezoomay) is arecord of one’s personal and professional details.
Itisadocumentthatintroducesyoui.e.theapplicanttoyourprospectiveemployerortrainer.
Ittellsthemwhoyouare,whatyouhavedone,andwhytheyshouldhireyouforthejob.
Your Resume should:
– mentioncareer goalsand specificjobobjectives.
–revealyouradequateknowledgeaboutthecompanybeingapproached.
– explainhowyourqualifications and experience are suitablefor the jobyouareseeking.
– give evidence of excellent writing skills.
Q2 ExplainImportanceofResume?
Theimportanceofagoodresumemustneverbeunderestimated.
a. First impressions are important.The rest impression that you make on a prospective trainer or
employer depends onthecontent and presentationofyour resume.
b. Inthisincreasinglycompetitivejobmarket,itisimperativethatyourresumemakesanimpression
and gives you the best possible chance of getting the employer’s or trainer’s attention.
Howevertheresumeisincompletewithoutacoverletter.
A cover letter is a letter that accompanies the resume and reflects your knowledge of the
employerortrainer.Itspurposeistointroduceyoutoanorganization,conveyyourinterestinthe
companyoraspecialvacancy,anddrawattentiontoyourresume.
Sincethisletterisoftenthebestcontactyouhavewithaprospectiveemployerortrainer,aneat,
concise,wellwrittenletterwillincreaseyourchancesofgettinganinterview.
Q3 ExplainformatofResume?
Thereare3differentformatsthatyoucanchoosefrom,whendecidingonhowyourresumeshould
bedisplayed:

Chapter-12 : Resume Writing - 403 -

1. A chronological resume
Thechronologicalresumeformatisthemostcommonlyused.Itlistsyourmostrecentworkor
educationhistoryinreversechronologicalorderi.e.Withyourmostrecentwork oreducation
history islistedontop.Thistypeofresumeplacesmoreemphasison yourjobtitlesandyour
employment history over your skills.
THINGSTOBEINCLUDEDINRESUMEIFYOUAREAPPLYINGASASTUDENTORAJOBAPPLICANT
S.NO. RESUMEFORMATSFORSTUDENTS RESUMEFORMATFORJOBAPPLICANTS
WITHSUBHEADINGS WITHSUBHEADINGS
1. Nameandcontactdetails Nameandcontactdetails
2. Objective Summary Objective Summary
3. Academic Qualifications and Achievements Career summary
4. Cocurricular Achievements Professional experience
Company1
Job title
Responsibilities/Achievements
Company2
Job title
Responsibilities/Achievements
5. Training Programs attended/completed Educational Details
6. Strengths Hobbies / Interests / Skills (optional)
7. Interests/Hobbies/ Skills (optional) Personal Details
8. Personal Details
2. A functional resume
x Thefunctionalorskillbasedresumeplacesmoreimportanceonyourskillsandaccomplishments.
x Jobtitlesandwhereyouhaveworkedpreviouslytake onsecondaryimportance.
x Theseresumesshowcase yourskillsandexperiencesand are most suitedfor peoplewhohave
gapsintheircareer.
x Thistypeofresumeisalsoidealforfreshgraduates,whoarenewtotheworkforce,orarelooking
tochangecareerpaths,orareapplyingforajobwithveryspecificrequirementsandcharacteristics
in mind.
3. Combination resume
x Amixofthechronologicalandfunctionalformatsisknownascombinationresume.
x They consist of asequential list of aperson’semployment and educationalhistory.
x Italsoincludesasectionthatfocusesonskills.
x Thiskind of resume is best suited for peoplewho want to highlight their employment history.
x A combination resume begins with the functional format and finishes with information of
employmenthistorywhichprovidesdetailsoforganisationsonehasworkedforwithdates.

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-404-
Q4 WhatarethethingsmandatoryinaResume?
Ans.
1. ContactInformation–Itisextremelyimportanttosupplyyourcontactdetailsonyourresume.Donot
forgettoincludeyourmailing address,telephoneormobilenumberandyouremail address.
2. CareerProfile –A brief summary ofyour skills and areas of expertiseshould be includedtogive the
potentialemployeranideaastowhatyoucando.
3. WorkExperience–Asmuchaspossible,includeallyourworkhistoryexperience,detailingthecompany,
jobtitle,responsibilitiesandthedatesofthecompanieswhereyouarecurrentlyworkingorpreviously
associated with.
4. Education – Include detailsof youreducation,includinglicensesorcertifications youhaveacquired.
5. Skills–Mentionanyrelevantskillsintermsofsoftwareandhardwaresystemsandothertechnical
skills.
WhatarethePointstorememberwhilewritingaresume:
A. Keeptheformatsimpleandreadable.
B. Restrictyourresumetominimumnumberofpages.Trytokeepitshortandcrisptoavoidboringyour
prospective employeror trainer.
C. Clearlystateyourobjective.
D. Providecorrectinformation.Avoidexaggerationsanduntruthsastheemployersortrainersmayverify
whatiswrittenintheresume.
E. Organisetheinformationinamannerthatowslogically,eitherfromacademicstojobexperiencefor
Resume Writing.
F. Toneshould beneutral; nobiastowards any community/religion.
G. Ensuretherearenogrammaticalerrors.
H. Highlight your achievements instead of responsibilities.
I. Unlessaskedfor,donotmentiontheexpectedsalaryintheresume.
SAMPLESOFRESUMES

Sample 1 (Chronological Format)

MOHITMEHTA
822,SFSFlats,SantaCruz
Mumbai220045
Phone:98XXXXXXXX
Email: [email protected]
OBJECTIVE:
Tobeassociatedwithanorganisationthatwilloffertometremendousopportunitiesforgrowthin
careerandprovideachallengingenvironmentthatwill utilisemyaccountingskillsandabilitiesto
themaximum.

Chapter-12 : Resume Writing - 405 -

EDUCATION:
2004 CA–FINAL
ICAI,Mumbai
2001 CAPCE
ICAI,Delhi
1998 CACPT
ICAI,Delhi
2000 B.Com. (Pass)
Hansraj College
DelhiUniversity
1997 Class XII (CBSE)
K.D.PublicSchool
ShalimarBagh
Delhi
1995 Class X (CBSE)
K.D.PublicSchool
ShalimarBagh
Delhi SKILLS
WellversedwithMSoffice
x Working knowledge of Tally
x Completed compulsory250hrsof ComputerTraining asperICAIcurriculumschedule.
Updated with all the latest computerapplications and softwares
PERSONAL DETAILS:
DateofBirth: 15July,1980
Marital Status: Married
LanguagesKnown:English,Hindi,Bengali,Marathi
PermanentAddress:822,SFSFlats,SantaCruzMumbai220045
DECLARATION
Isolemnlydeclarethatallthe aboveinformation iscorrecttothe bestofmyknowledgeandbelief.
Date:19/09/2014
Place:
(MOHITMEHTA)
Sample 2(Functional Format)
RAVISHARMA
Phone:917–XXX–XXX
Email:ravisharma@gmail.com
Address:98GreenMeadows,Mangalore,Karnataka.
Birthday:September3,1993
CAREEROBJECTIVE

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-406-
 Seekingachallengingcareerwithaprogressiveorganizationthatprovidesanopportunitytoutilizemy
technical skills & abilities in the eld of information technology (IT).
TECHNICALSKILLS
Hardware troubleshooting
Network troubleshooting
Programming (Java, C++, Visual Basic, Android Programming Language)
Microsoft Office (MS Word, Excel, Powerpoint, Internet, etc)
Adobe Creative Suite (Photoshop, In Design, After Effects, Dreamweaver)
PERSONAL SKILLS
Excellent written and verbal communication skills
Highly organized and efficient
Abilitytoworkindependentlyoraspartofateam
Proven leadership skills and ability to motivate
EDUCATION
B.TechinInformationandCommunicationsEngineering(2010–2014)
M.J. Institute of Technology
Boni Avenue, Mangalore, Karnataka
ACHIEVEMENTS/RESPONSIBILITIES
x President,AssociationofComputerStudents(20132014)
x LayoutArtist,TheM.J.StudentMagazine(20122014)
PREPROFESSIONAL EXPERIENCE TechnicalSupport Intern IT Department
ABCBusinessServices,Mangalore,Karnataka(June2013–Feb2014)
Provided Level 1 support, handled troubleshooting and maintenance as well as monitoring and
deployment of IT
REFERENCES:
Will be provided upon request.
DECLARATION
Isolemnlydeclarethatallthe aboveinformation iscorrecttothe bestofmyknowledgeandbelief.
Date:
Place:
(RAVISHARMA)
Sample3(CombinationFormat)
SALMANKHAN
1207,MintoRoad
Pune,Karnataka.
Tel:954XXXXXXX/email:[email protected]
CAREEROBJECTIVE
SeekingtoworkforaprogressiveorganisationatthepostofaLaboratoryTechnician,JuniorTechnologist
or Quality Control Assistant within the Food Processing,Pharmaceutical or Chemical Manufacturing
industry which will provide opportunities to utililize my skills & abilities.

Chapter-12 : Resume Writing - 407 -

 SUMMARYOFQUALIFICATIONS
IndepthunderstandingofthemanufacturingprocessofFoodsandPharmaceuticalsincludingResearch,
ProductTesting,InProcessControl,ProductionPlanning,ProcessOperations,StatisticalQualityControl,
Experimental Techniques, Product Development and Technical Documentation.
Have a handson training and laboratory experience along with the competency to conduct detailed
experiments andtesting, interprettheir results and prepare written reportsfor them.
I am an enthusiastic, industrious and creative individual and possess strong analytical, investigative,
decision making, and communication skills.
EDUCATION
JINDALCOLLEGEOFAPPLIEDARTS
Pune, Maharashtra.
B.TechinFoodandDrugTecchnology(3yearUndergraduateProgramme)
MajorAreasofStudy:
PracticesofFoodManufacturing
Processing Operations
Statistical Quality Control
Pharmacology
Analytical Chemistry
FoodScience &Nutrition
OVERVIEWOFSKILLSANDEXPERIENCEACQUIREDTHROUGHTRAINING
Carried out detailed analysis of foods utilising modern instrumentation.
Identified possible risk factors such as toxins, contaminations and foreign bodies using practical
applications of microbiology in testing pharmaceuticals and foods.
Carriedouttestsonnumerousproductsinalaboratoryforqualityandproductsubstitution.
Studiedindepthabouttherulesandregulationsthatcontrolthemarket..8
Employed techniques of analysis involving electrochemical, spectroscopy, gas chromatography, and
highpressure liquid chromatography (HPLC).
EMPLOYMENT EXPERIENCE
JBCHEMICALS,Pune,Maharashtra20052017
SalesManager(full–time)
Ensuredthatexcellentservicewasprovidedtocustomersafteridentifyingtheirneedsandproviding
appropriateproductinformation.
Tracked,recordedandveri_edtheshippingofproductsfromwarehousesacrossthecountry.Was
awarded
“MostPromisingEmployee”and“PinnacleAward”forreliabilityandcommitmenttodelivering
great
customerservice.
COMPUTER SKILLS
ProficientintheuseofadvancedtestinginstrumentsincludingXYZTestingSuite.
ExpertintheuseofMicrosoftWord,ExcelandPowerPoint.
Possesstheabilitytoquicklyandindependentlylearnnewcomputerapplications.
REFERENCES
Availableuponrequest

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-408-
 DECLARATION
I solemnlydeclarethatalltheaboveinformationiscorrecttothebestofmyknowledgeandbelief.
Date:
Place:

Salmankhan
FormatofaCoverLetter
Acoverlettermustgivetherecipientareasontobeinterestedinyou.Itmustalsoexplainwhyyou
areinterestedinthepositionandtheorganisation.
Coverletters/Jobapplicationsatypeofformalletter,therefore,theyfollowasimilarformat.
Givenbelowisabasicoutlineforthecoverletter.
Sender’s Address
Date
Designation/NameofAddressee
Addressof Addressee
Salutation
Subject

Content
1. Introduction:
Theleadsentenceshouldstatethepositionyouarepursuing.Alsomentionhowyoulearntabout the
opportunityorthecompany.
2. Body:
Highlightthemostrelevantskillsandexperiencefromyourresume.
This section of your cover letter should contain a detailed description of what you can offer  to the
company.
Therefore, you must make strong associations between your capabilities and the requirements
mentionedinthejobdescription.
Highlightandexplainclearlyhowandwhyyourskillsandexperiencemakeyoua suitablecandidatefor
thejob.AlsoExplainwhyyouareinterestedinthejob,andconveyyourawarenessofwhatthecompany
doestoshowthatyouhavedone careful researchalready.
3. Conclusion:
Concludeyourapplicationletterbythankingtheemployerforconsideringyoufortheposition.Include
informationonhowyouwillfollowup,whencananintervieworfacetofaceinteractionbedone.
Complimentary Close
Signature
(Name in Capital letters)

Chapter-12 : Resume Writing - 409 -

 Sample
B343, First Floor
Gandhinagar
Udaipur ,RAJASTHAN
manika [email protected]
July20,20XX
H.R.Manager
Air Atlantic
237,SafdarjangEnclave
Delhi
DearMs.Giri
SUBJECT:ApplicationforthepostofFlightAttendant
Thisiswithreferencetoyouradvertisementin‘TheTimesofIndia’datedJuly15,20XXforthepostof
FlightattendantinAirAtlantic.Iwishtoapplyforthesame.Iamconfidentthatmydynamiccustomer
serviceandteamworkskillswillmakemeastrongmemberofyourcrew.
Myextensiveexperienceinthecustomerserviceindustryhastaughtmethevalueofprovidingpositive,
individualized service to all customers. As a restaurant host, I made sure to promote each guest’s
comfort and wellbeing. As an awardwinning sales representative, I worked oneonone with
customerstoensurethatalloftheirquestionsaboutproductswereansweredandthateachcustomer
feltlistenedto.IwouldbringthispositiveenergyandhospitalitytomyjobasafightattendantatAir
Atlantic.
Myexperienceandstrengthasateamplayerwillalsomakemeastrongcrewmember.Asahost,Ihad
tobeinconstantcommunicationwiththewaitstaff,thekitchen,andthemanagement.Mypositivity
and clear communication skills helpedstrengthen our team’seciency and sense of community.
IknowIwouldbeanintegralpartofthedynamiccrewatAirAtlantic.
Iwouldlovetheopportunitytospeakwithyouabouthowmyskillsandexperiencewouldmakemean
assettoyourightcrew.IwillcallyouinaweektodiscusshowIcancontributetoAirAtlantic.Thankyou
somuchforyourtimeandconsideration.
Sincerely
Manika
(Manika Verma)
WhatarethePointstorememberwhilewritingacoverletter:
x A.Usecorrectformat.i.e.theformatofaformalletter.
x B.Donotrepeatinformationprovidedinyourresume.
x C.Keepitshortandtothepoint.
x D.Mentionwhatpostorcourseyouareapplyingfor.
x E. Explainwhyyou are interestedin the job/courseand thecompany/institution.
x F.Drawattentiontoyoursuitabilityforthepost.
x G.Laythegroundworkforfurthercontact.

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-410-
 CLASSWORK
Q1 You are Mitali / Mitanshu Joshi, a resident of Green Park, New Delhi. You have recently come across an
advertisement from NDTV in The Hindustan Times forthe post of a senior journalist. Draft a resume
alongwithacoverletterinresponsetotheadvertisement.

Q2 You are Suresh/Smita. You come across the following advertisement in a national daily. You consider
yourself suitable and eligible for the post. Write an application in response to the advertisement.
Attach your resume.

ApplicationsareinvitedforthepostofaNurseryteacherinareputedschoolof Delhi.Thecandidate
must have at least 5 years’ experience of teaching tinytots. The applicant must have a pleasant
personality.

He/sheshouldbecreativeandinnovative.Attractivesalary.InterestedcandidatesshouldapplytoThe
Principal, AKS International, Indirapuram, New Delhi within 10 days with detailed resume.

Q3 DraftaresumeforafresherwithaBachelorsdegreeinCommerce,applyingforajobinfinance.He/
she hasnowork experience.

Q4 Draftyourownresumeusingthechronologicalformat.

Q5 Makeafriend’sresume,whohasbeeninthecorporateforaboutsixyearsandhaschangedtwojobsin
thistimespan.Usethefunctionalorskillbasedformattodrafttheresume.

HOMEWORK1
Q1 DraftaResumeforapplyingforthepositionofaArticleTraineeinaCAfirm?

Q2 DraftaResumeasaSeniorcomputerAnalystina1.7company?

HOMEWORK2
Q1 Prepareachronologicalresumeofcommercebackgroundstudent,havingworkedinafirmfor1year,
andgainedexperienceingeneralmanagementskills.ThecandidatehasclearedIPCC,Group1.

Q2 Draftacoverletterinreplytothebelowadvt.,publishedinTheHindustanTimes,dated13/2/18.

ApplicationsareinvitedforthepostofanAccountantinaprivatefirm,AgropowerLtd,NewDelhi.

Theapplicantmust have an experience of aboutfouryearsina similar rolewith good knowledge of
Tally.Salaryofferedwillbecompetitivewiththeindustry.PleasesendyourdetailedCV’swithacover
letter to the following address:

AgroPowerLtd,

Sukhdev Vihar

NewDelhi110025

Foranyqueries,dropamailto[email protected]

Chapter-12 : Resume Writing - 411 -

Q3 Prepare a detailed resume in the functional format for a candidate applying for the post of a sales
managerinanFMCGcompany.Includepastexperiences,withemphasison the salesbackground.

Otherinputs:Name:ManishReddy

Experience:over10years,(divideitintotwojobs)

Current designation: Senior Sales Executive

Q4 Mr.MohitAgarwal,aresidentofMeerut,haverecentlycomeacrossanadvertisement,forajobvacancy
inaleadingTVChannelforthepostofjournalist,inTheTimesofIndiadated August1,2018.

DraftaResumealongwithacoverletterinresponsetotheadvertisement. [Sugg.Nov18,5Marks]

Q5 Draftyourresumeforthepositionofarticledtraineeinafirm. [MTPApril19,5Marks]

Q6 Draft a resume for Sushma Ranganathan, who has passed class XIIth, has completed her B.com with
flying colours, from a wellreputed college/university. She has to write her CA finals and is quite
hopefulofclearingtheexamsinfirstattemptandnowwishestoapplyforajobintheAuditdepartment.
Mention auditing as her skill expertise. [MTPMarch19,5Marks]

Q7 Prepare acover letter anddetailed résumé in the functional format for a candidate applying for the
post of a journal Trainee. Include past experiences, withemphasis on the journalism.

Otherinputs:Name:RaviPrakashMandal

Experience: 2 years,(divideit into two jobs/company)

Current designation: Junior Journal Trainee [MTPOct195Marks]

Q8 Prepare a detailed resume in the functional format for a candidate applying for the post of a sales
managerinanFMCGcompany.Includepastexperiences,withemphasison the salesbackground.

Other inputs: Name: Manish Reddy

Experience:over10years,(divideitintotwojobs)

Current designation: Senior Sales Executive [MTPAug19,5Marks]

Q9 YouarePrashantKumar/LaxmiAhuja,aresidentofJuinagar,Mumbai.Youhaverecentlycomeacrossan
advertisementin Hindustan Times(NewsPaper)for TraineeArticlein FinanceatS.R.Pvt Ltd.Drafta
cover letter in response to the advertisement and enclose your Curriculum Vitae. [RTPMay20]

Q10 You are Shikha/Ashutosh. You are applying for Industrial Trainee Articles at GAIL Ltd. Write a Cover
Letterandattachyourcurriculumvitae(CV). [RTPMay20]

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting- 412 -
Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting- 414 -
 CHAPTER13
MEETINGS

1. DefinitionandIntroduction
AccordingtoBusinessDictionaryameetingisdefinedas,‘Formalorinformaldeliberativeassemblyof
individualscalledtodebatecertainissuesandproblems,andtotakedecisions.Formalmeetingsare
heldatdefinitetimes,atadefiniteplace,andusuallyforadefinitedurationtofollowanagreedupon
agenda.Inacorporatesetting,theyaredividedintotwomaingroups.
(1) Organizational meeting: Normally a regular meeting involving stockholders (shareholders) and
management,suchasaboardmeetingandannualgeneralmeeting(AGM).
(2) Operationalmeeting:Regularoradhocmeetinginvolvingmanagementandemployees,suchas
a committee meeting, planning meeting, and sales meeting.
2. Objectives:
1. Meetings are conducted by people within an organization to resolve any problems and issues
faced while completing any work, to chalk out new strategies to promote business/ increase
profitability,toexchangeideasandinformation, toensurecoordinationonissuesontheagenda
and effective communication within the group/organization.
Foranymeetingtobesuccessful,itneedsthesupportofthegroupinvolved,ortheorganization
behinditanditmusthavetheintentionofachievingsomegoalorobjective.
3. TheRequisitesforaMeetingare:
1. Select the Right Participants: The participants in the meeting have to be chosen with extreme
careOftenpeopleareincludedbecausetheybelongtothedepartmentorareapartoftheteam,
or because you don’t want to offend anyone. To engage in a purposeful meeting, participants
musthaveareasonforattending;apointofviewabouttheissue,theneedtoknow,theauthority
tomake a decision,orany usefulinformation,that will add value to thediscussion and lead to
some conclusion.
2. SendIntimationtoallparticipants:Thenoticeforthemeetingshouldbesentbyaproperauthority
atleast23daysbeforethemeetingsothatparticipantshavetimetogatherinformationanddata
requiredforit.Itmusthaveinformationaboutdate,time,venue,namesofparticipantsandthe
agenda of the meeting.
3. SetanAgenda:Anagendamustbeprovidedbeforethemeeting.Agendasaretheframeworkon
whichthemeetingstands.Itcommunicatesthesubjectofthemeeting,thespeakers,timeallotted
toeachspeakeretc.

Chapter-13 : Meetings - 415 -

 4. AppointaFacilitator:Afacilitatorisappointedtoguidethemeetingtoitslogicalconclusion.His
taskistoaidthegroupinreachingaconsensusintakingadecision.Themembersofthegroupare
accountableandcommittedtotheresolutiontakenbythem.Heensuresthatthemeetingstays
on track, helps by providing astructure to a process, and enables cooperative decisionmaking
without conflict.
5. ArriveatClearConclusionsandFormulateNextSteps:Manytimesmeetingsfailtocometoclear
and unambiguous conclusions about the points under consideration. After deliberation on an
agendatopic,itisnecessarytosummarizewhatwasdiscussed;statelucidlythedeductionsarrived
at,anddecideonthefuturestepsthatneedtobetaken.Attheconclusionofthemeeting,briefly
recounttheproceedingsandsummarize thefuturecourse ofaction.
6. Create Opportunities For Creativity and Participation: In most meetings the structure is top
centric,thatis,theseniormanagementspeaksandthejuniorsonlycontributewhenaskedtogive
theirinput.Whenthereisalackoffreeflowofideas,informationandopportunitiestospeak,the
membersfailtocontributeperspective,curiosity,andcreativity.Insuchascenariothepurposeof
themeetingisdefeated.Ameetingshouldbeopportunitytobringmultipleperspectivesintothe
roominordertocollaborate,debate,decide,andperformtherealworkofateam.
4. NeedforanAgenda:
Agendasare the blueprintsfor buildingsuccessfulmeetings.Theyarevitaland essential as they:
a. State the objective/purpose of the meeting.
1b.Informofissues/topicstobediscussed.
c. Keepthemeetingfocusedontheissue.Itdoesnotallowspeakerstodeviatefromthesubjects
andissuesathand.
d. Give timeto the participants understandand prepare fortheir roles. e.    Allot specifictime to
each speaker.
f. Informthesequence inwhich themembers speak.
An example oftabular agenda

Time Topic Attendees Speaker Duration

9:00am Introduction Namesof the participants Nameofthespeaker 15minutes

9:15am

Discussing upcoming

strategyforlaunchof

new product Namesof theparticipants Nameofthespeaker 30minutes

9:45amProject Report Namesoftheparticipants Nameofthespeaker 30minutes

10:15am Tea break All members 20minutes

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-416 -
10:35am Markettrends Namesof the participants Nameofthespeaker 25minutes

11:00am Details on costing Namesoftheparticipants Nameofthespeaker 30minutes

11:30am Open house Questions and discussions 20minutes

from participants

11:50am Thankyounote All members Chairperson 10minutes

TemplateforMeetingAgenda:

5. MinutesofaMeeting:
i. Minutes, alsoknownasprotocols or,informallynotes,aretheinstantwrittenrecordofa meetingor
hearing. They typically describe the events of the meeting and may include a list of attendees, a
statement of the issues considered by the participants, and related responses or decisions for the
issues.
ii. The Reasons for writing meetingminutes: Writingminutesisextremelyimportantas
a. Various participants may have different recollections of the meeting.
b. Diverse interpretations of action plan possible.
c. Importanttaskscanbeforgotten.

Chapter-13 : Meetings - 417 -

 d. Datesofsubmissionofsubjectmatter/report/actiontakenplanoverlooked/achievementof
specified tasks pushed forward.
e. Awrittenrecord isalwaysavailableforreadyreference.f. Usedasremindersforoneselfand
others.
g. Canberequiredforlegalreasons
iii. Steps in writing meeting minutes:
Pointsto be keptinmind whilewritingminutesofmeeting:
1. PrePlanning It is essential in taking appropriate and complete notes ofthe meeting.
• Useacopyofmeetingagendaasaguidelinetotakenotesandpreparetheminutes.
• Useasimilarorderandnumberingofitemsasontheagendaforthemeeting.
• Notedown thenamesofallpeopleattendingthemeetinginadvance.
• Alldocumentsandhandoutsusedorgiveninthemeetingshouldbeledforfuturereference
andtobesharedwithothers.
• Getclearinstructionsoftheexpectationsofyourroleduringthemeeting,aswellasthetype
of details expected in the minutes.
2.    Record taking at the meeting Understand  the type of information you need to recordat the
meeting.
Though severalorganizationshave their own structuresin place, there are severalpoints which
arecommontoall:
•Mentiondateandtimeofmeeting.
•Namesofallattendingthemeetingandalsooftheabsentees.
•Thecorrectionandamendmentsmadewithreferencetothepreviousmeetingminutes.
•Thedecisionstakenabouteachagendaitem.
•Thenecessarystepstakenorwillbetakenwithreferencetotheissue.
•Thefutureplanofaction.
•Dateandtimeofnextmeeting,ifdecided.
SuggestionsforTakingNotes:
a. Have a format/ structure ready. Note down main points to be discussed in the agenda so that you
simplyjotdownthealldetailsofdiscussions,decisionsetc.undereachmain/subpoint.Includespace
below eachitemonyouroutlineforyourhandwrittennoteswhichcanbeprinted later.
b. Keeparecordofattendees–ensurethatthenamesofallpeopleattendingthemeetingarenoted.
c. Mention all absentees at themeeting.
d. Makenotesonallitemsfordiscussiononagendasidebysidetoensureaccuracy.
e. Askforanyclarificationifthereisambiguityatanypoint.
f. Donottrytocaptureitallasitisimpossibletowritedownthecompleteproceedingsofthemeeting.
Therefore,write(ortype)justthedecisions,assignments,actionsteps,etc.simply,clearlyandconcisely.
g. Recordit–youcanalsorecordthemeeting(e.g.,onyoursmartphone,iPad,recordingdevice,etc.).
However,all participants mustknowthattheproceedings are beingrecorded.Therecordingisuseful
if you need clarifications.
3.TheMinutesWritingProcess
Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-418 -
 Afterthemeetingisover;youhavetowritetheminutes.
• Accuraterecordingdependsonwritingthereportwhileyoucanrecallallthathappened.
• Gothroughyourworkagain.Youmaydecidetoaddsomedetailsanddeletesomematter.
• Recheckwith allconcernedtoensurethatalldecision,resolutionsandmotionsarecorrectlynoted.
• Ensurethatallrequireddetailsarenoted,especiallyifthemeetingsarelengthyandlongdrawn
Deliberations have taken place.
• Allnotesshould bebriefand clear.
• Ensureproper sequence,flowandgrammatical accuracy.
• Donotincludeanyconflictsorpersonalcomments.
reference material can beattached in the appendix or mention where it can be f
4. Circulating/SharingMinutesoftheMeeting
Ifyouhavetocirculatetheminutesofthemeeting,besurethattheappropriateauthorityhasreviewed
and approved the minutes. You can either send hard copies or share the minutes (if the authorities
permitit)viaanemail.
5. Filing/Storageof MeetingMinutes
After the   final approval, the minutes need to be stored for future reference. The minutes can be
storedonline,inharddrivesorprintedandputin files.
Exampleofminutesofmeeting:
Minutes
Date:5thDec,2016
Meetingsstartedat9:00am.
Mr.Ramesh, Chairperson gavean introduction.
Mr.Kamlesh,ProductHeadspokeaboutthenewproduct.
Ms.Shalini,RegionalManager,Business,gaveadetailedprojectreport.(Marketsurveys,futureaspects,
challenges included).
Participants approved of Ms. Shalini’s report. Appreciated the meticulous detailing.
Mr.Rehman,MarketingHeaddiscussedthemarketscene,demandandsupplyandcustomerinterest.
Mr.Satyan,DirectorFinance,gavedetailsofcosting.FinanceteamledbyMrX,Mr.YandMr.Zwerepart
of the presentation.
TheChairpersondeclaredanopenhouseforparticipantstoputuptheirconcerns,andfinallygavea
vote of thanks.
Conclusions stated.
Proposalfor more funds put forward.Tenders to be released.
ATRwillbesubmittedby12thDec,2016.
6. ActionTakenReport(ATR)
ActionTakenReportisareportcompiledfewdaysafterameeting,statingthevariousactionstakenas
per the discussions made.
ATRmustalways be submittedafter a gap ofabout 57 days, or more,after the meetings. This gives
appropriatetimeforactionstobetakenandthemattertobediscussed/statedintheformofareport.
ActionTakenReport(sample)
5thDec,2016
Asperthemeetingheldon5thDec,2016attheHeadOfficeofSVTechnologies,followingactionshave
been reported:
•Theclienthadcompliedtodeliverthegoodsby4thDec.Workdone
•Theclienthasaskedformoretimeforinstallationof600KVturbine.
•Theorderhasbeenretainedandclient’sproposalhasbeenagreedto.
Undersigned
Director, Sales&Marketing
Director, Business
Chapter-13 : Meetings - 419 -
 CLASSWORK

Q1 TheManagingCommitteeofBharatShikshaInstitutehasdecidedtobringchangesintheEnglishand
Accountancy syllabus for the first year course. Mr.Kamal Kapoor, the Academic Dean of the institute,
has been assigned the task of convening  a meeting  of all stakeholders  subject experts, college
lecturers, students and members  of print and publishing department, to decide the necessary
alterationsinthesyllabi.AsKamalKapoor–
Set an agenda for  the meeting.(Suggestions  for discussionsReview previous syllabus, identify
redundanttopics,suggestinclusionoflatestrelevantcontent,includeconstructiveandusefulcontent
fromstudent point ofview,discusstime frameforcompletion ofrevamping)
a. Informyoursecretary,Ms.SwatiSingh,towritetheminutesofthemeeting.
b. Submit an ‘ActionTaken Report’ to themanagingcommittee.
(Eachsectionshouldbewritteninabout200words)
Q2 The Marketing Head of Aptex Products, a consumer goods company, plans to conduct a meeting to
review the effectiveness of marketing policies of the previous year and plan strategies for the next
year toincrease the pro t margin of the company. (Attendees should be from marketing, advertising
and media, and research and development department)
a. Setanagendaforthemeeting(suggestionsfordiscussionproductsthatgarneredhighsalesand
thosethatfailedtomakethemark;reasonsforpoorsales;newresearchanddevelopmentinput,
novel advertising means)
b. Designateyoursecretarytowritethe minutesofthemeeting.
c. Ask the junior marketing analyst, Mr. Sudeep Roy, to submit an ‘Action Taken Report’ to him
within seven days.
(Eachsectionshouldbewritteninabout200words)

HOMEWORK1

Q1 Third Annual General Meeting of ABC Limited was held on 28th September, 2007.Several businesses
were transacted at the meeting including the adoption of annual accounts for the year ended 31st
March, 2007. The meeting was attended by 30 members in person and 5 members in proxy. Draft
minutes of the Annual General meeting.

Q2 ThestatutorymeetingofPQRLimitedwasheldon20thJanuary,2010atitsregisteredofficeatKolkata.
Asasecretaryofthecompany,drafttheminutesofthestatutorymeetingoftheshareholdersofthe
company.

Navkar Institute | CA Foundation | Paper 2 : Business Laws and Business Correspondence and Reporting-420-
 HOMEWORK2

Q1 SubmitanActionTakenReport,basedonameetingheldtodiscussthefailureoflongpendingduesby
anoldclient.Mentionclearlywhatdecisionwastaken.

Q2 Yourcompany,primarilyintoFMCGhaswitnessedagradualdeclineinaconsumerproductoverthelast
sixmonths.Prepare theminutesofthemeetingforthesame.Membersinthemeeting:

HeadoftheSalesandMarketing,ProductHead,Productleadandfewteammembers.

Q3 As an employee of a CA firm, prepare the agenda of an upcoming Partner’s visit, in tabular form.
Includeseniorexecutivesinthemeeting,discusstheagendaforthemeetingandhowtheonedayvisit
ofthePartnerneedstobeplanned.

Q4 ThemarketingHeadoftheATour&TravelsLtd,atravelcompany,planstoconductameetingtoreview
theeffectivenessofplan&policiesofthepreviousyearandstrategiesforthenextyeartoincreasethe
profitmarginofthecompany.(Attendeesshouldbefrommarketing,advertisementandR&D).Prepare
minutesofthemeetingfor thesame. [MTPOct19,5Marks]

Q5 Yourcompany,primarilyintoFMCGhaswitnessedagradualdeclineinaconsumerproductoverthelast
sixmonths.Preparetheminutesof themeetingforthesame.Membersin themeeting:Headofthe
SalesandMarketing,ProductHead,Productleadandfewteammembers.

[MTPAug19,5Marks]

Q6 YourCompanyislaunchinganewproductinthenextyear.Preparetheminutesofthemeetingforthe
same.Membersinthemeeting;HeadoftheSalesandMarketing,Producthead,andconcernedTeam
Member. [RTPMay20]

Q7 Asanemployeeofanacademicinstitute,preparetheagendaofanupcomingpartner’svisitintabular
format. [RTPMay20]

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Chapter-13 : Meetings - 421 -