CS Final :: Advanced company law & practice : December 2004

Roll No…………………
Time allowed : 3 hours Maximum marks : 100
Total number of questions : 8 Total number of printed pages : 3


Note:Answer SIX Questions including Question No.1 which is compulsory.

1. (a)

Draft a memorandum of appearance before the Company Law Board in a matter involving oppression on majority of members in a company.

(b)

Progressive Ltd. failed to apply for the approval of the Central Government to an increase in the number of directors beyond that stipulated in its articles of association. Advise

(c) Draft a resolution for appointment of a cost auditor.
(d)

What consequences could arise out of an inspector’s report on investigation into the affairs of a company under section 237(b) of the Companies Act, 1956 upon finding misconduct of business ?

(5 marks each)
2. (a)

Guzdar had placed a fixed deposit with Chemex India Ltd. which matured on 15th September, 2003. Despite surrendering the original fixed deposit receipt duly discharged to the company’s registered office followed up by a series of reminders, Guzdar has not been paid the principal amount. Draft the application to be made by Guzdar to the appropriate bench of the Company Law Board. Also indicate the documents and papers required to be annexed to the application.

(12 marks)
(b)

Discuss the rights of a person who is not a party to a proceeding before the bench of Company Law Board to inspect records of a particular proceeding or obtain copies of petitions/replies relating to that proceeding.

(4 marks)
3. (a) The Central Government has powers to remove the auditor before the expiry of his term. Comment.
(8 marks)
(b)

Your company wants to declare dividend for the year 2003-04 ending on 30th June, 2004. As on that date, the company’s balance sheet showed —
(i)Carried forward loss (after charging depreciation) – Rs.3,50,000
(ii)Depreciation charged and included in arriving at the carried forward loss – Rs.3,75,000

The company was incorporated in January, 1980 and it has earned a net profit of Rs.4,50,000 for the year 2003-04 before charging depreciation which amounted to Rs.1,10,000. The company did not declare any dividend during the past several years because of incurring losses. It desires to declare dividend of Rs.2,50,000 for the year 2003-04. The company does not have any distributable free reserves. Advise.

(8 marks)
P.T.O
2/2004/ACLP

( 2 )

331

4. Comment on any four of the following :
(i)

Appointment of receiver for a company automatically terminates employment contracts entered into by it.

(ii)

The Central Government has unlimited authority to delegate any of its powers and functions under the Companies Act, 1956

(iii)

No limit can be placed on an Inspector carrying out inspection under section 209A of the Companies Act, 1956 as to the type of books he can call for.

(iv)The winding up of a company is the same thing as the insolvency of a company.
(v)Reduction of share capital is always subject to confirmation by the court
(4 marks each)
5. (a) Discuss the nature of contributory’s liability in the winding up of a company.
(4 marks)
(b)

The emphasis on regulation of transactions in securities appears to weigh over the federal character of a corporation in the USA. Comment.

(10 marks)
(c)

Under what circumstances, shall a court require security from a limited company which is a plaintiff in a suit?

(2 marks)
6. (a)

Detail with corresponding case laws, four grounds each in which courts have or have not ordered winding up of the company on the ‘just and equitable’ ground.

(8 marks)
P.T.O
2/2004/ACLP

( 3 )

331

(b)

List out the items to be included in the report on corporate governance in the annual report of the companies as recommended by the Kumar Mangalam Birla Committee

(8 marks)
7. (a)

An order pursuant to the section 454 (1) has been made by the court for winding up a company and one of the directors and Company Secretary are directed to inter-alia submit the necessary documents to the liquidator. Subsequently, the proceedings to convict the Company Secretary for an alleged default in complying with the requirements of the section were admitted although he pleaded that there were valid reasons for such non-compliance. Will he get the relief ?

(4 marks)
(b)

Can non-receipt of dividend warrant by a shareholder duly posted by a company within the time stipulated by law and not returned undelivered to the company, be considered an offence under section 205A(8) of the Companies Act, 1956 for prosecution of its directors?

(4 marks)
(c)

A company filed annual return after delay of over 16 months beyond due date with additional fees. The Registrar of Companies initiated prosecution proceedings. The directors challenged the proceedings on the ground that filing with additional fees regularised the delay. Discuss.

(4 marks)
(d)

During inspection of books of account of a company by a government agency, embezzlement on the part of management came to light. Does this automatically call for an investigation under section 237 of the Companies Act, 1956?

(4 marks)
8.

Precision Ltd. has decided to convert itself into a private company. Advise the steps required to be taken and also draft a specimen application.

(16 marks)

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2/2003/ACLP

 

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