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Idea Institute Of Management And Technology Essay Sample

Idea Institute Of Management And Technology Pages
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Q.1. “Discharge refers to the termination of contractual relationship between the parties”. Explain the statement along with different modes of discharging a contract. Answer:
Discharge refers to the termination of contractual relationship between the parties. The contract ceases to operate, i.e., when the rights and obligations under the contract ends. According to Sections 73-75 of the Contracts Act, a contract may be discharged in several modes. Performance or tender

The obvious mode of discharge of a contract is by performance, where the parties have done whatever was contemplated under the contract. Thus, where A contracts to sell his/her car to B for Rs. 185000, as soon as the car is delivered to B and B pays the agreed price for it, the contract comes to an end by performance. The tender or offer of performance has the same effect as performance. If a promisor tenders performance of his/her promise but the other party refuses to accept it, the promisor stands discharged of his/her obligations. Mutual consent

Section 62 of the Act states that if the parties to a contract agree to substitute a new contract for the old or rescind or alter the terms, the original contract is discharged. A contract may be terminated by mutual consent in any of the six ways, viz., novation, rescission, alteration and remission, waiver and merger. Impossibility of performance

A contract may be discharged because of impossibility of performance. There are two types of impossibility: One that is inherent in the transaction
One that may emerge later by the charge of certain circumstances material to the contract. Operation of law
Discharge by operation of law may take place in three ways:
By death of the promisor in cases involving personal skill or ability By insolvency,
By merger
Q.2. Explain the meaning of Power of Attorney, its types and clause related to registration. Answer:
Meaning
Power of attorney is defined by section 2(21) of the Stamp Act as including “any instrument not chargeable with a fee under the law relating to court fees for the time being in force,” that empowers “a specified person to act for and in the name of the person executing it”. In common parlance, a power of attorney is an instrument or a deed by which a person is empowered to act for and in the name of the person executing it. Types

If the deed conferring power by one to another relates to one single transaction, it is known as special power of attorney. If the deed conferring power relates to several transactions it is general power of attorney. Registration

As a general rule, registration of power of attorney is not necessary. However, if it authorises the donee to recover the rent of an immovable property of the donor for the donee’s benefit, it would require a registration. Also, a power creating a charge in favour of the donee upon an immovable property referred to therein will need a registration. Further, Section 32(c) of the Registration Act, 1908, requires that where a document is presented for registration by the agent of a person entitled to present it for registration, such agent must be duly authorised by power of attorney executed and authenticated in manner as mentioned in Section 33 of the Act. Such a power of attorney is to be executed before and authenticated by a registrar or sub-registrar. The power of attorney, however, executed before a public notary in India will not enable the agent to present any document for registration under the Registration Act, 1908. Power of attorney is required to be embossed on non-judicial stamp paper. The amount of stamp duty varies with different types of powers as described in the Stamp Act and varies in different states of India. Q.3. Explain the procedure of registration of partnership firms. Answer:

Application for registration
Section 58 lays down the procedure for registration of partnership firms. A partnership firm may be registered at any time by post, or delivering to the Registrar of Firms of the area in which the business of the firm is situated or proposed to be situated, a statement in the prescribed form and accompanied by the prescribed fee, stating: Firm’s name

Place or the principal place of business
Names of any other places where the firm carries on business Date when each partner joined the firm
Names in full and addresses of the partners, and Duration of the firm
The statement must be signed by all partners, or by their agents especially authorised in that behalf and duly verified. When the Registrar of Firms is satisfied that the provisions of Section 58 have been duly complied with, he/she registrars the firm by recording an entry of the statement in a register called the Register of Firms and files the statement. The Registrar then issues a Certificate of Registration. Registration is effective from the date when the Registrar files the statement and makes entries in the Register of Firms.

Registration of firms is optional
The Act does not provide for compulsory registration of firms. It is optional and there is no penalty for non-registration. However, section 69 has effectively ensured registration of firms by introducing certain disabilities that an unregistered firm suffers from. Q.4. What are the circumstances under which breach of condition is treated as breach of warranty? Answer:

According to Section 13, under certain circumstances, a breach of condition is to be treated as a breach of warranty, i.e., the right to repudiate the contract is deemed to have been lost. These circumstances are: Where a contract of sale is subject to any condition to be fulfilled by the seller, the buyer may either: Waive the condition

Elect to treat the breach of the condition as a breach of warranty. In such situations, the buyer is active and is either waiving the condition or electing to treat the breach of condition as a breach of warranty. If the buyer decided to waive the condition, he/she cannot later on insist that the condition be fulfilled. Where the buyer treats the breach of condition as a breach of warranty, he/she has to give a notice to the seller to that effect. There is also a compulsory treatment of breach of condition as a breach of warranty. Where the contract of sale is not severable and the buyer has accepted the goods or part thereof, the breach of any condition to be fulfilled by the seller can only be treated as a breach of warranty. However, the agreement may provide otherwise, i.e. may permit repudiation of the contract in spite of the acceptance of the goods by the buyer. Q.5. Explain the procedure for filing a complaint and admission of complaint in consumer protection act. Answer:

Procedure for filing a complaint
There is no fee for filing a complaint before any of the aforesaid bodies. The complainants or their authorised agent can present the complaint in person. The complaint can also be sent by post to the appropriate Forum/Commission. The complaint should be addressed to the president of the Forum/Commission. A complaint should contain the following information: Name, description and address of the complainant

Name, description and address of the opposite party or parties, as the case may be, as far as they can be ascertained. Facts relating to complaint and when and where it arose

Documents, if any, in support of the allegations contained in the complaint. Relief that the complaint is seeking.
Admission of complaint (Section 13)
Procedure in respect of goods where the defect requires no testing or analysis The District Forum should send a copy of admitted complaint to the opposite party mentioned in the complaint within 21 days of admission. He should be instructed to provide his version of the case within 30 days or may be granted a further extension of 15 days, at the discretion of the forum. If the opposite party disputes the allegations or fails to take any action, the forum can settle the dispute as specified in the Act. Procedure in respect of goods where the defect requires analysis or testing With respect to goods which need to be tested or analysed for defects, the District Forum should obtain a sample of goods from the complainant and should take steps to seal and authenticate the sample and send it to the appropriate laboratory for testing or analysis.

This exercise should be carried out to ascertain whether the goods suffer from defects alleged by the complainant and the results of such tests must be provided within 45 days. This period may be extended by the Forum, if necessary. The complainant is obliged to bear the necessary charges towards the analysis/testing and needs to deposit these fees to the forum. The Forum, in turn, remits the amount deposited to the laboratory which undertakes the test or analysis. Upon receiving the report, the Forum then forwards a copy of the same, along with its remarks, to the opposite party seeking clarification. The Forum then provides reasonable opportunity for both the complainant and the opposite party to be heard. Q.6. Write short notes on: (a) Shares and its classification (b) Meetings and its classification Answer:

Shares and its classification
Section 2 (46) defines a share “as a share in the share capital of a company and includes stock except where a distinction between stock and share is expressed or implied.” This definition does not encompass the meaning of a share. A share of a company in the hands of a shareholder signifies a bundle of rights and obligations. However, a share is not a negotiable instrument. Preference shares

A preference share is one that carries the following two rights over holders of equity shares: A preferential right in respect of dividends at a fixed amount or at a fixed rate, and A preferential right in regard to repayment of capital on winding up. Equity shares

Equity share’ means a share that is not preference share (Section 85). The rate of dividend is not fixed. The Board of Directors recommends the rate of dividend that is then declared by the members at the Annual General Meeting. Before recommending dividend on equity shares, the Board of Directors have to comply with the provisions of law as regards depreciation, transfer of a minimum amount to reserves, etc. The holders of equity shares have voting rights in proportion to the paid-up equity capital of the company. Cumulative Convertible Preference Shares

The government of India vide its guidelines dated 19 August 1985 permitted issue of another class of shares by public limited companies, called cumulative convertible preference shares. Deferred or founder’s shares

A private company can issue shares of a type other than those above (Section 90). Thus, it may issue what are known as deferred shares. As deferred shares are normally held by promoters and directors of the company, they are usually called founder’s shares. Non-voting shares

‘Non-voting shares’ as the term suggests are shares that carry no voting rights. These are contemplated as altogether a different class of shares which may carry additional dividends in lieu of the voting rights. Sweat equity shares

The Companies Act, 1999, allowed issue of sweat equity shares subject to fulfilment of certain conditions. The new Section 79A was inserted for this purpose. Meetings Section 291 empowers the Board of directors to manage the affairs of the company. In this context, meetings of shareholders and directors become necessary. The Act has made provisions for following different types of meetings of shareholders: Statutory meetings (Section 165)

The most important legal provisions regarding statutory meetings are: It is required to be held only by a public company having share capital. It must be held within a period of not less than one month and not more than six months from the date on which the company is entitled to commence business. At least 21 days before the day of meeting, a notice of the meeting is to be sent to every member stating it to be a Statutory Meeting. Annual general meeting (Sections 166-168)

As the name signifies, this is an annual meeting of a company. The provisions relating to this meeting are: Every company, whether public or private,, having a share capital or not, limited or unlimited must hold this meeting. The meeting must be held in each calendar year and not more than 15 months shall elapse between two meetings. The maximum gap between two such meetings may be extended by three months by taking permission of the Registrar, who may so allow for any special reason. The meeting must be held

On a day that is not a public holiday
During business hours
At the registered office of the company or at some other place within the city, town or village in which the registered office is situated. Extraordinary Meeting (Section 169)
Clause 47 of Table A provides that all general meetings other than AGMs shall be called the EGMs. The legal provisions as regards such meetings are: EGM is convened for transacting some special or urgent business that may arise in between two AGMs, for instance, change in the objects or shift of registered office or alteration of capital. An EGM may be called by:

Directors of their own accord
Directors on requisition
Requisitionists themselves
The Tribunal
Class Meetings
A company has two classes of shares- equity shares and preference shares. The class meetings are held for these different classes of shareholders, as and when their rights are affected.

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