Suggested answer May 2019 - Corporate and Allied Laws paper

MCQs

1. Contracting state means any country or place outside India in respect of which arrangements have been made by the CG with government of such country through treaty or otherwise

1(A)

1(B)



1(C)



2(A)



2(B)


2(C)



3(A)



3(B)



3(C)


3(D)



3(E)



4(A)



4(B)



4(C)



4(D)

Prohibition of loans (Section 29)

No insurer shall grant loans or temporary advances either on hypothecation of property or on personal security or otherwise, except loans on life insurance policies issued by him within their surrender value, to any director, if a company or to any other company or firm in which any such director,  holds the position of a director. 

This shall not apply to such loans made by an insurer to a banking company, as may be specified by the Authority. 

Further this shall not be applicable from granting such loans or advances to a subsidiary company or to any other company of which the company granting the loan or advance is a subsidiary company if the previous approval of the Authority is obtained for such loan or advance. 

The provisions of section 185 of the Companies Act, 2013 shall not apply to a loan granted to a director of an insurer being a company, if the loan is one granted on the security of a policy on which the insurer bears the risk and the policy was issued to the director on his own life, and the loan is within the surrender value of the policy.

5(A)

Period for filing of appeal: Every appael to AT against order of Tribunal) shall be filed within a period of 45 days from the date on which a copy of the order of the Tribunal is made available to the person aggrieved and shall be in such form, and accompanied by such fees, as may be prescribed:

Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said period of 45 days from the date aforesaid, but within a further period not exceeding 45, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within that period.

5(B)

Nidhi Rules, 2014

Directors -

(1) The Director of a Nidhi shall hold office for a term up to ten consecutive years on the Board of Nidhi.

(2) The Director shall be eligible for re-appointment only after the expiration of two years of ceasing to be a Director.

Dividend.- A Nidhi shall not declare dividend exceeding 25%. or higher amount as may be specifically approved by the Regional Director for reasons to be recorded in writing and further subject to the following conditions, namely:-

(a) an equal amount is transferred to General Reserve;

(b) there has been no default in repayment of matured deposits and interest; and

(c) it has complied with all the rules as applicable to Nidhis.

5(C)

Appeals to Appellate Tribunal [Section 26]

Section 26 deals with the right and time frame to make an appeal to the Appellate Tribunal.

1. Appeal by Director or any other person: The Director or any person aggrieved by an order made by the Adjudicating Authority under this Act may prefer an appeal to the Appellate Tribunal.

The appeal shall be filed within a period of 45 days from the date on which a copy of the order made by the Adjudicating Authority is received and it shall be in such form and be accompanied by prescribed fees.

2. Appeal by reporting entity: Any reporting entity aggrieved by any order of the Director made under sub-section (2) of section 13 may prefer an appeal to the Appellate Tribunal .

The appeal shall be filed within a period of 45 days from the date on which a copy of the order made by the Director is received and it shall be in such form and be accompanied by prescribed fees.

3. Condonation of delay: The Appellate Tribunal may, after giving an opportunity of being heard, entertain an appeal after the expiry of the said period of forty -five days if it is satisfied that there was sufficient cause for not filing it within that period.

5(D)

The word 'or' is normally disjunctive and 'and' is normally conjunctive. However, at times they are read as vice versa to give effect to the manifest intention of the legislature as disclosed from the context. This would be so where the literal reading of the words produces an unintelligible or absurd results. In such a case 'and' may be read for 'or' and 'or' for 'and' even though the result of so modifying the words is less favourable to the subject, provided that the intention of the legislature is otherwise quite clear.

6(A)

(i) Alter AOA from 15 to 18, then pass SR. [First Proviso to 149(1)(b)]

(ii) First Proviso to 149(1)(b) not applicable to Government company GSR 463(11)

6(B)

Section 186(2) No company shall directly or indirectly —

(a) give any loan to any person or other body corporate;

(b) give any guarantee or provide security in connection with a loan to any other body corporate or person; and

(c) acquire by way of subscription, purchase or otherwise, the securities of any other body corporate,

exceeding 60%. of its paid-up share capital, free reserves and securities premium account or 100% of its free reserves and securities premium account, whichever is more.

186(3) Where the giving of any loan or guarantee or providing any security or the acquisition under 186(2) exceeds the limits specified in 186(2), prior approval by means of a special resolution passed at a general meeting shall be necessary.

Where a loan/guarantee given by company  to its wholly owned subsidiary or joint venture, the requirement of section 186(3) shall not apply. 186(3)

6(C)

“cartel” includes an association of producers, sellers, distributors, traders or service providers who, by agreement amongst themselves, limit control or attempt to control the production, distribution, sale or price of, or, trade in goods or provision of services

6(D)

Section 57 Letter of request to contracting state in certain cases.

1. Issue of letter of request

2. Transmission of letter of request

3. Letter of request to be deemed as an evidence