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Usage Only when the people are literate Used on both literate and illiterate
and cooperative. people.
MAY2017
Define research. Discuss its importance in the current scenario.
Research is defined as a careful consideration of study regarding a particular concern or a problem using
scientific methods. According to the American sociologist Earl Robert Babbie, “Research is a systematic
inquiry to describe, explain, predict and control the observed phenomenon. Research involves inductive and
deductive methods.”
The research and innovation ecosystem in India at current scenario presents an important and significant
opportunity for multinational organizations across the globe due to its intellectual capital available in the
country. Today numerous MNCs have shifted or are going to shift their research and development (R&D)
base to India. According to Indian Brand Equity foundation the Overall India-based R&D Globalization and
R&D Services market reached US$ 20 billion in 2015, up by 9.9 per cent over 2014.The govt. of India is
now focusing more and more on research and development sector which can easily be concluded from the
union budget 2015-16. The industry demands more and more fund to emphasize the research and
development program in the social sector where the ample opportunity is present. Our Scientific fraternity
has been in a right track to find the opportunity from the social sector.
There are several research organizations like DRDO, ISRO, IISc etc has been taken initiative towards the
social innovation where several satellites has been in 2015 to improve our life style in terms of
communication and information.
What are the various statistical tools applied in research for data analysis?
Statistical methods involved in carrying out a study include planning, designing, collecting data, analysing, drawing
meaningful interpretation and reporting of the research findings. The statistical analysis gives meaning to the
meaningless numbers, thereby breathing life into a lifeless data. The results and inferences are precise only if proper
statistical tests are used. This article will try to acquaint the reader with the basic research tools that are utilised while
conducting various studies. The article covers a brief outline of the variables, an understanding of quantitative and
qualitative variables and the measures of central tendency. An idea of the sample size estimation, power analysis and
the statistical errors is given. Finally, there is a summary of parametric and non-parametric tests used for data analysis.
The type of statistical methods used for this purpose are called descriptive statistics. They include both numerical
(e.g. mean, mode, variance…) and graphical tools (e.g. histogram, boxplot…) which allow to summarize a set of
data and extract important information such as central tendencies and dispersion.
State the criteria for evaluating research reports.
1. Identify the author's thesis. Determine what the author is arguing for or against. ...
2. Note all main ideas. Identify the main ideas of the work in order to analyze its structure. ...
3. Research unfamiliar material. ...
4. Describe the work in your own words. ...
5. Identify any appeals used. ...
6. Evaluate how well the author conveyed meaning.
Thus, the researcher can apply either of the sampling methods depending on the size of the population and
the objective of the research.
Some of them may be continuous or regular and others are periodical and irregular.
b. Unpublished Sources: The statistical data needn’t always be published. There are various sources of
unpublished statistical material such as the records maintained by private firms, business enterprises,
scholars, research workers, etc. They may not like to release their data to any outside agency.
Editing data:
Information gathered during data collection may lack uniformity. Example: Data collected through
questionnaire and schedules may have answers which may not be ticked at proper places, or some questions
may be left unanswered. Sometimes information may be given in a form which needs reconstruction in a
category designed for analysis, e.g., converting daily/monthly income in annual income and so on. The
researcher has to take a decision as to how to edit it.
Editing also needs that data are relevant and appropriate and errors are modified. Occasionally, the
investigator makes a mistake and records and impossible answer. “How much red chilies do you use in a
month” The answer is written as “4 kilos”. Can a family of three members use four kilo chilies in a month?
The correct answer could be “0.4 kilo”.
Care should be taken in editing (re-arranging) answers to open-ended questions. Example: Sometimes “don’t
know” answer is edited as “no response”. This is wrong. “Don’t know” means that the respondent is not sure
and is in a double mind about his reaction or considers the questions personal and does not want to answer
it. “No response” means that the respondent is not familiar with the situation/object/event/individual about
which he is asked.
Coding of data:
Coding is translating answers into numerical values or assigning numbers to the various categories of a
variable to be used in data analysis. Coding is done by using a code book, code sheet, and a computer card.
Coding is done on the basis of the instructions given in the codebook. The code book gives a numerical code
for each variable.
Now-a-days, codes are assigned before going to the field while constructing the questionnaire/schedule.
Pose data collection; pre-coded items are fed to the computer for processing and analysis. For open-ended
questions, however, post-coding is necessary. In such cases, all answers to open-ended questions are placed
in categories and each category is assigned a code.
Manual processing is employed when qualitative methods are used or when in quantitative studies, a small
sample is used, or when the questionnaire/schedule has a large number of open-ended questions, or when
accessibility to computers is difficult or inappropriate. However, coding is done in manual processing also.
Data classification/distribution:
Sarantakos (1998: 343) defines distribution of data as a form of classification of scores obtained for the
various categories or a particular variable. There are four types of distributions:
1. Frequency distribution
2. Percentage distribution
3. Cumulative distribution
4. Statistical distributions
Tabulation of data:
After editing, which ensures that the information on the schedule is accurate and categorized in a suitable
form, the data are put together in some kinds of tables and may also undergo some other forms of statistical
analysis.
Table can be prepared manually and/or by computers. For a small study of 100 to 200 persons, there may be
little point in tabulating by computer since this necessitates putting the data on punched cards. But for a
survey analysis involving a large number of respondents and requiring cross tabulation involving more than
two variables, hand tabulation will be inappropriate and time consuming.
Usefulness of tables:
Tables are useful to the researchers and the readers in three ways:
What are the promotion schemes carried out by government to promote SSI?
Measures to Promote Small Scale Industries in India
Small Scale Industries have contributed a lot for the development of the economy of India. Still SSI face problems due
to the nature and size of their business. Some of the measures that can be taken by government and NGOs to boost the
performance are as follows:
1. Government should ensure that adequate financial assistance is provided to SSls through banks and financial
institutions. The rate of interest on loans should be low. Financial assistance must be provided to SSI through
unsecured loans or after obtaining minimum security.
2. Insurance coverage must be extended to new and existing small scale industries.
3. The gap that exists between consumers and small business must be bridged through effective marketing. Lot of
industrial fairs, exhibitions must be organized by the government to encourage the sale of SSI products.
4. The infrastructural facilities must be improved and measures must be taken to enhance the supply of water,
electricity to backward and rural areas.
5. Technological support must be provided to SSI to import machinery at lower cost.
6. Many industrial estates must be established by the government.
7. The informal money market should be regulated to avoid exploitation by money lenders on small scale
industrialists.
8. Training must be provided to entrepreneurs in technological, managerial, financial and marketing areas.
9. Awareness campaigns must be carried out in full swing to encourage youngsters to become first generation
entrepreneurs.
10. The sick industries must be rejuvenated instead of liquidation.
11. The licensing procedure must be simple and at ease.
12. Fair Incentives and subsides must be given to SSI units and an awareness must be made about the incentives
available to new entrepreneurs
13. Export promotion schemes must be devised in such a way that encourages SSI to export their goods.
Discuss the legal aspect of entering in to primary and secondary capital market.
The main components of capital market are: 1. Primary Market 2. Secondary Market !
1. Primary Market (New Issue Market):
Primary market is also known as new issue market. As in this market securities are sold for the first time, i.e., new
securities are issued from the company. Primary capital market directly contributes in capital formation because in
primary market company goes directly to investors and utilises these funds for investment in buildings, plants,
machinery etc.
The primary market does not include finance in the form of loan from financial institutions because when loan is
issued from financial institution it implies converting private capital into public capital and this process of converting
private capital into public capital is called going public. The common securities issued in primary market are equity
shares, debentures, bonds, preference shares and other innovative securities.
What is meant by technology transfer? Examine the policy of the Indian Government in this regard.
PROS:-
1. Seed funding for various Startups and ventures which leads to manufacturing and launch in global
market.Due to this the potential idea is turned into a finisu product.
2. Startups and ventures leads to creation of employment and job opportunity to earn earning for
people.
3. FDI leads to more investment in Research and development (R&D) which tends to development in
science and technology which ultimately leads to improvement in finish product.
4. Competition between companies to be on leads better products and at cheaper rates
CONS:-
1. More investment leads to ownership on the company to the concerned foreign entitiy or individual
due which its indigenousness comes to an end.
2. Loss of a potential idea in name in our own country
Example :
Alibaba is the biggest shareholders of Paytm holding 40% of total stakes.Further it is planing to increase its
stake to 67% making it the owner of the Indian company by investing more money in it.
PROS
1. Increase in revenue generation
2. Increase in Employment generation
3. Getting the latest technology
4. Culture exchange
5. Increase Diversity
6. Infrastructure Development
7. Price Reduction
8. Ultimately benefit the customer
CONS
1. Foreign Investors are volatile
2. The imbalance between sectors and states
3. Tax Evasion
4. Money Laundering
5. Harms Domestic Companies
6. Possibility of Inflation
7. Increase in dependency
8. Political Involvement
What are the powers of Government of India under Environmental Protection Act, 1986?
Power of Central Government to take Measures to Protect and Improve Environment
(1) Subject to the provisions of this Act, the Central Government shall have the power to take all such
measures as it deems necessary or expedient for the purpose of protecting and improving the quality of
the environment and preventing, controlling and abating environmental pollution.
(2) In particular, and without prejudice to the generality of the provisions of sub-section (1), such
measures may include measures with respect to all or any of the following matters, namely :
(i) co-ordination of actions by the State Governments, officers and other authorities –
(a) under this Act, or the rules made thereunder; or
(b) under any other law for the time being in force which is relatable to the objects of this Act;
(ii) planning and execution of a nation-wide programme for the prevention, control and abatement of
environmental pollution;
(iii) laying down standards for the quality of environment in its various aspects;
(iv) laying down standards for emission or discharge of environmental pollutants from various sources
whatsoever :
Provided that different standards for emission or discharge may be laid down under this clause from
different sources having regard to the quality or composition of the emission or discharge of
environmental pollutants from such sources;
(v) restriction of areas in which any industries, operations or processes, or class of industries, operations
or processes shall not be carried out or shall be carried out subject to certain safeguards;
(vi) laying down procedures and safeguards for the prevention of accidents which may cause
environmental pollution and remedial measures for such accidents;
(vii) laying down procedures and safeguards for the handling of hazardous substances;
(viii) examination of such manufacturing processes, materials and substances as are likely to cause
environmental pollution;
(ix) carrying out and sponsoring investigations and research relating to problems of environmental
pollution;
(x) inspection of any premises, plant, equipment, machinery, manufacturing or other processes, materials
or substances and giving, by order, of such directions to such authorities, officers or persons as it may
consider necessary to take steps for the prevention, control and abatement of environmental pollution;
(xi) establishment or recognition of environmental laboratories and institutes to carry out the functions
entrusted to such environmental laboratories and institutes under this Act;
(xii) collection and dissemination of information in respect of matters relating to environmental
pollution;
(xiii) preparation of manuals, codes or guides relating to the prevention, control and abatement of
environmental pollution;
(xiv) such other matters as the Central Government deems necessary or expedient for the purpose of
securing the effective implementation of the provisions of this Act.
(3) The Central Government may, if it considers it necessary or expedient so to do for the purposes of
this Act, by order, published in the Official Gazette, constitute an authority or authorities by such name
or names as may be specified in the order for the purpose of exercising and performing such of the
powers and functions (including the power to issue directions under section 5) of the Central
Government under this Act and for taking measures with respect to such of the matters referred to in
sub-section (2) as may be mentioned in the order and subject to the supervision and control of the
Central Government and the provisions of such order, such authority or authorities may exercise the
powers or perform the functions or take the measures so mentioned in the order as if such authority or
authorities had been empowered by this Act to exercise those powers or perform those functions or take
such measures.
‘‘All agreements are not contract but all contracts are agreement’’– Discuss.
A contract is a legally binding agreement or relationship that exists between two or more parties to do or
abstain from performing certain acts. There must be offer and acceptance for a contract to be formed. An
offer must backed by acceptance of which there must be consideration. Both parties involved must intend to
create legal relation on a lawful matter which must be entered into freely and should be possible to perform.
Definition of contract
According to section 2(h) of the Contract Act 1872:
” An agreement enforceable by law is a contract.”
A contract therefore, is an agreement the which creates a legal obligation i.e., a duty enforceable by law.
From the above definition, we find that a contract essentially consists of two elements:
(1) An agreement and (2) Legal obligation i.e., a duty enforceable by law.
Example;
A promises to sell a horse to B for Rs.100,000, and B promises to buy horse at that price.
All contracts are agreements:
For a Contract to be there an agreement is essential; without an agreement, there can be no contract. As the
saying goes, “where there is smoke, there is fire; for without fire, there can be no smoke”. It could will be
said, “where there is contract, there is agreement without an agreement there can be no contract”. Just as a
fire gives birth to smoke, in the same way, an agreement gives birth to a contract.
What is agreement?
An agreement is a form of cross reference between different parties, which may be written, oral and
lies upon the honor of the parties for its fulfillment rather than being in any way enforceable.
As per section 2 (e) of Contract At 1872:
” Every promise and every set of promises, forming the consideration for each other, is an agreement.”
Thus it is clear from this definition that a ‘promise’ is an agreement.
What is a ‘promise‘?
the answer to this question is contained in section 2 (b) which defines the term.” When the person to whom
the proposal is made signifies his assent thereto the proposal is said to be accepted. A proposal, when
accepted, becomes a promise.”
An agreement, therefore, comes into existence only when one party makes a proposal or offer to the other
party and that other party signifies his assent thereto.
All agreements are not contracts
As stated above, an agreement to become a contract must give rise to a legal obligation. If an agreement is
incapable of creating a duty enforceable by law. It is not a contract. Thus an agreement is a wider term than
a contract.
Agreements of moral, religious or social nature e.g., a promise to lunch together at a friend’s house or to
take a walk together are not contracts because they are not likely to create a duty enforceable by law for the
simple reason that the parties never intended that they should be attended by legal consequences
On the other hand, legal agreements are contracts because they create legal relations between the parties.
EXAMPLE: a- A invites B to dinner. B accepts this invitation but does not attend the dinner. A can not sue
B for damages. It is social agreement because it does not create legal obligation. So it is not a contract.
b- A promises to sell his car to B for one million. It is legal agreement because it creates legal obligations
between the parties. So it is a contrac
According to section 10 of the contract act 1872,
“All agreements are contracts if they are made by the free consent of the parties, competent to contract, for
a lawful consideration and with a lawful object and not hereby declared to be void.”
Thus an agreement becomes a contract when at least the following conditions are satisfied.
1-free consent
2-competency of the parties
3-lawful consideration
4- lawful object.
Conclusion:
In a nut shell, an agreement is the basis of a contract and contract is the structure constructed on these basis.
An agreement starts from an offer and ends on consideration while a contract has to achieve an other
milestone that is enforceability. Due to this, breach of an agreement does not give rise to any legal remedy to
the aggrieved party while breach of contract provides legal remedy to the aggrieved party against the guilty
party. Thus we can say that all contracts are agreements but all agreements are not contracts.
Explain the implied conditions and warranties in contract of sale of goods Act, 1930.
Express and Implied Conditions / Warranties: A Sale
Conditions and warranties may be express or implied.
Express conditions and warranties are which, are expressly provided in the contract. Implied conditions and
warranties are those which are implied by law or custom; these shall prevail in a contract of sale unless the
parties agree to the contrary.
i) Condition as to title -- In every contract of sale, unless the circumstances of the contract are such as to
show a different intention, there is an implied condition on the part of the seller, that :
a. In case of a sale, he has a right to sell the goods, and
b. In case of an agreement to sell, he will have a right to sell the goods at the time when the property is
to pass.
The words 'right to sell' contemplate not only that the seller has the title to what he purports to sell,
but also that the seller has the right to pass the property. If the seller's title turns out to be defective,
the buyer may reject the goods.
ii) Condition as to Description -- In a contract of sale by description, there is an implied condition that the
goods shall correspond with the description. The term ' sale by description' includes the following situation ;
a. Where the buyer has not seen the goods and buys them relying on the description given by the seller.
b. Where the buyer has seen the goods but he relies not on what he has seen but what was stated to him
and the deviation of the goods from the description is not apparent.
c. Packing of goods may sometimes be a part of the description. Where the goods do not conform to be
method of packing described (by the buyer or the seller) in the contract, the buyer can reject the
goods.
iii) Condition as to Quality or Fitness -- Where the buyer, expressly or by implication, makes known the
seller the particular purpose for which goods are required, so as to show that the buyer relies on the seller's
skill or judgment and the goods are of a description which it is in the course of the seller's business to supply
(whether or not as the manufacturer of producer), there is an implied condition that the goods shall be
reasonably fit for such purpose. In other words, this condition of fitness shall apply, if:
a. The buyer makes known to the seller the particular purpose for which the goods are required,
b. The buyer relies on the seller's skill or judgment,
c. The goods are of a description which he sellers ordinarily supplies in the course of his business, and
d. The goods supplied are not reasonably fit for the buyer's purpose.
iv) Condition as to Merchantability -- Where the goods are bought by description from a seller, who deals in
goods of that description (whether or not as the manufacturer or producer) there is an implied condition that
the goods shall be of merchantable quality.
Merchantable quality ordinarily means that the goods should be such as would be commercially saleable
under the description by which they are known in the market at their full value.
v) Condition as to Wholesomeness -- In case of sale of eatable provisions and foodstuff, there is another
implied condition that the goods shall be wholesome. Thus, the provisions or foodstuff must not only
correspond to their description, but must also be merchantable and wholesome. By 'wholesomeness' it means
that goods must be for human consumption.
vi) Condition Implied by Custom or Trade Usage: An implied warranty or condition as to quality or fitness
for a particular purpose may be annexed by the usage of trade. In certain sale contracts, the purpose for
which the goods are purchased may be implied from the conduct of the parties or from the nature or
description of the goods. In such cases, the parties enter into the contract with reference to those known
usage. For instance, if a person buys a perambulator or a medicine the purpose for which it is purchased is
implied from the thing itself; the buyer need not disclose the purpose to the seller.
vii) Conditions in a Sale by Sample: A contract of sale is a contract for sale by sample where there is a term
in the contract, express or implied to that effect. Usually, a sale by sample is implied when a sample is
shown and the parties intend that the goods should be of he kind and quality as the sample is.
viii) Conditions in a sale by Sample as well as by Description: A vast majority of cases where samples
are shown, are sales by sample as well as by description. In a contract for sale by sample as well as by
description, the goods supplied must correspond both with the sample as well as with the description.
Implied Warranties
A condition becomes a warranty when --
a) the buyer waives the conditions or opts to treat the breach of the condition as a breach of warranty ; or
b) The buyer accepts the goods or a part thereof, or is not in a position to reject the goods.
i. Implied Warranty of Quiet Possession -- In every contract of sale, unless there is a contrary intention,
there is implied warranties that the buyer's shall have and enjoy quiet possession of the goods. If the
buyer's right to possession and enjoyment of the goods is in any way disturbed as consequences of
the seller's defective title, the buyer may sue the seller for damages for breach of this warranty.
ii. Implied Warranty of Freedom from Encumbrances -- The buyer is entitled to a further warranty that
the goods shall be free from any charge or encumbrance in favor of any third party not declared or
known to buyer before or at the time when the contract is made. If the buyer is required to discharge
the amount of the encumbrance it shall be a breach of this warranty and the buyer shall be entitled to
damages for the same.
6. Minor as a partner:
A partnership is created by an agreement. And if a partner is incapable of entering into a contract, he cannot
become a partner. Thus, at the time of creation of a firm a minor (i.e., a person who has not attained the age
of 18 years) cannot be one of the parties to the contract. But under section 30 of the Indian Partnership Act,
1932, a minor ‘can be admitted to the benefits of partnership’, with the consent of all partners. A minor
partner is entitled to his share of profits and to have access to the accounts of the firm for purposes of
inspection and copy.
He, however, cannot file a suit against the partners of the firm for his share of profit and property as long as
he remains with the firm. His liability in the firm will be limited to the extent of his share in the firm, and his
private property cannot be attached by creditors.
On his attaining majority, he has to decide within six months whether he will become regular partner of
withdraw from partnership. The choice in either case is to be intimated through a public notice, failing
which he will be treated to have decided to continue as partner, and he becomes personally liable like other
partners for all the debts and obligations of the firm from the date of his admission to its benefits (and not
from the date of his attaining the age of majority). He also becomes entitled to file a suit against other
partners for his share of profit and property.
7. Other partners:
In partnership firms, several other types of partners are also found, namely, secret partner who does not want
to disclose his relationship with the firm to the general public. Outgoing partner, who retires voluntarily
without causing dissolution of the firm, limited partner who is liable only up to the value of his capital
contributions in the firm, and the like.
However, the moment public comes to know of it he becomes liable to them for meeting debts of the firm.
Usually, an outgoing partner is liable for all debts and obligations as are incurred before his retirement. A
limited partner is found in limited partnership only and not in general partnership.
Contents of a prospectus:
1. Address of the registered office of the company.
2. Name and address of company secretary, auditors, bankers, underwriters etc.
3. Dates of the opening and closing of the issue.
4. Declaration about the issue of allotment letters and refunds within the prescribed time.
5. A statement by the board of directors about the separate bank account where all monies received out of
shares issued are to be transferred.
6. Details about underwriting of the issue.
7. Consent of directors, auditors, bankers to the issue, expert’s opinion if any.
8. The authority for the issue and the details of the resolution passed therefore.
9. Procedure and time schedule for allotment and issue of securities.
10. Capital structure of the company.
11. Main objects and present business of the company and its location.
12. Main object of public offer and terms of the present issue.
13. Minimum subscription, amount payable by way of premium, issue of shares otherwise than on cash.
14. Details of directors including their appointment and remuneration.
15. Disclosure about sources of promoter’s contribution.
16. Particulars relation to management perception of risk factors specific to the project, gestation period of
the project, extent of progress made in the project and deadlines for completion of the project.
Discharge by performance
Where both the parties have either carried out or tendered (attempted) to carry out their obligations under the
contract, is referred to as discharge of the contract by performance. Because performance by one party
constitutes the occurrence of a constructive condition, the other party’s duty to perform is also triggered, and
the person who has performed has the right to receive the other party’s performance. The overwhelming
majority of contracts are discharged in this way.
Discharge by lapse of time
A contract stands discharged if not enforced within a specified period called the ‘period of limitation‘. The
Limitation Act, 1963 prescribes the period of limitation for various contracts. For instance, period of
limitation for exercising right to recover an immovable property is twelve years, and right to recover a debt
is three years. Contractual rights become time barred after the expiry of this limitation period. Accordingly,
if a debt is not recovered within three years of its payment becoming due, the debt ceases to be payable and
is discharged by lapse of time.
Discharge by Impossibility of Performance
Sometimes after a contract has been established, something might occur, though not at the fault of either
party, which can render the contract impossible to perform, or illegal, or radically different from that
originally undertaken.
However, if whatever happens to prevent the contract from being performed
has not been caused by either party
could not have been foreseen, and
its effect is to destroy the basis of the contract
then the courts will, generality, state that the contract has become impossible to perform. If that happens
then the contract is discharged and neither party will have any liability under it. Section 56 of the Indian
Contract Act clearly provides that an agreement to do an act impossible in itself is void
The performance of a contractual obligation may become subsequently impossible on a number of grounds.
They include the following.
Objective impossibility of performance
Commercial impracticability
Frustration of purpose
Temporary impossibility
Section 68 to Section 72 of the Indian Contract Act, 1872 deals with Five Kinds of Quasi-Contract which
are as follows -
1) Claim for necessaries supplied to person incapable of contracting, or on his account (Section 68) -
" If a person, incapable of entering into a contract, or anyone whom he is legally bound to support, is
supplied by another person with necessaries suited to his condition in life, the person who has furnished such
supplies is entitled to be reimbursed from the property of such incapable person.
Illustrations -
(a) A supplies B, a lunatic, with necessaries suitable to his condition in life. A is entitled to be reimbursed
from B’s property.
(b) A supplies the wife and children of B, a lunatic, with necessaries suitable to their condition in life. A
is entitled to be reimbursed from B’s property.
2) Reimbursement of person paying money due by another, in payment of which he is
interested (Section 69) -
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.
Illustration -
B holds land in Bengal, on a lease granted by A, the zamindar. The revenue payable by A to the
Government being in arrear, his land is advertised for sale by the Government. Under the revenue law, the
consequence of such sale will be the annulment of B’s lease. B to prevent the sale and the consequent
annulment of his own lease pays the Government the sum due from A. A is bound to make good to B the
amount so paid.
3) Obligation of person enjoying benefit of non-gratuitous act (Section 70). -
Where a person lawfully does anything for another person, or delivers anything to him, not intending to do
so gratuitously, and such another person enjoys the benefit thereof, the letter is bound to make compensation
to the former in respect of, or to restore, the thing so done or delivered.
4) Responsibility of finder of goods (Section 71) -
A person who finds goods belonging to another, and takes them into his custody, is subject to the same
responsibility as a bailee.
5) Liability of person to whom money is paid, or thing delivered, by mistake or under coercion
(Section 72) -
A person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or
return it.
Illustrations -
(a) A and B jointly owe 100 rupees to C, A alone pays the amount to C, and B, not knowing this fact, pays
100 rupees over again to C. C is bound to repay the amount to B.
(b) A railway company refuses to deliver up certain goods to the consignee except upon the payment of an
illegal charge for carriage. The consignee pays the sum charged in order to obtain the goods. He is entitled
to recover so much of the charge as was illegal and excessive.
Companies can be classified into different types based on their mode of incorporation, the liability of the
members, and number of the members. The most common types of companies are:
Royal Chartered Companies
Statutory Companies
Registered or Incorporated Companies
Companies Limited By Shares
Companies Limited By Guarantee
Unlimited Companies
Public Company (or Public Limited Company)
Private Company (or Private Limited Company)
One Person Company
Royal Chartered Company – These are companies formed under the Royal Charter of a company or by
a special order of king or queen. Eg. East India Company formed by the Royal Charter of Great Britain.
Such a company derives its nature on the basis of the charter under which they are formed.
Statutory Company – It is incorporated by a special Act passed either by the Central or State
legislature. Companies intended to carry on some business of national importance are formed this way to
provide a service to its citizens. Eg. RBI formed under RBI Act 1934.
Registered Companies – A company registered under the companies Act 2013 or any other existing
Act. It is governed by the companies Act 2013.
Company limited by shares – It is a company in which the liability of the members (shareholders)
limited i.e. they are only liable for the unpaid value of shares held by the member. The unpaid amount
can be called upon any time during the life time or winding up of the company. If the shares of a
member are fully paid up then his liability will be nil.
Company limited by Guarantee – In such a company the Liability of shareholders is limited up to the
amount guaranteed or invested by the shareholder towards the assets of the company in the event of its
being wound up. The amount guaranteed can be only demanded at the time of its wound up, hence it is a
reserve capital. Such companies are generally formed to promote art, science, commerce, sports etc. and
are not for profit making.
Unlimited companies – A company having no limit on the liability of its Shareholders is an unlimited
company. Thus the liability may extend to the personal property of the Shareholders in case the company
is not able to satisfy its claims at the time of winding up. This liability of members is like a partnership
where they have to contribute according to the ratio of amount invested in the company.
Holding and Subsidiary company – Where one company controls the management of another
company, the former is called the holding company and the later over which the control is exercised is
termed as a subsidiary company. 1. A company shall deemed to be a holding company of another, if that
other is a subsidiary 2. A company shall be deemed to be subsidiary of another company if the other
company – Controls the composition of its Board of Directors. Holds more than half of nominal value of
equity share capital.
It is a subsidiary of another company which is another company’s subsidiary. If it holds more than 50%
of the total voting rights of the company.
Private Company – The term “private company” has been defined under section 2(68) of Companies
act 2013. A private company means a company, which has a minimum paid up share capital of Rs. 1
lakh and which provides the following restrictions through its Articles of Association and Memorandum
– Restricts the transfer of shares by its members Limits the maximum number of members to 50
Prohibits any invitation or acceptance of public deposits Prohibits invitation to public for debentures of
the company It enjoys special privileges also – It can be started with only 2 members (minimum
members) It is not required to prepare a prospectus and it can start its operations immediately after
receiving the certificate of incorporation.
Public company – The term ‘public company’ has been defined under section 2(71)of Companies act
2013. A ‘public company’ means a company which has minimum paid up share capital of Rs. 5 lakh and
which is not a private company. It has the following features – It does not restrict transferability of
shares At least 7 members are required to form a public company There is no restrictions on the number
of members.
It has atleast 3 directors Its name end with the word “limited” It can accept public deposits and invite
public for subscription of its shares and debentures A private company which is a subsidiary of a public
company will also be considered a public company under this Act
Domestic company – A company which is based in India registered under the Companies Act 2013.
The head Office and its business operations are conducted within the country. It can either be private or
public.
Foreign company – A Foreign company is a company incorporated outside India which establishes its
business operations within India under the Companies Act 2013. Within 30 days of its establishment, it
has to furnish important documents to the registrar as per Sec 380. They are: A certified copy of the
charter of the company Memorandum and Articles of Association of the company Address of the
registered office List of directors and secretary Full address of the principle place of business in India
Name and address of the authorised person to do business on behalf of the company in India.
One Man Company – Where one man holds practically the whole of the share capital of a company and
takes a few more dummy members simply to meet the statutory requirements of the minimum number of
persons such a company is one man company. A one man company can be incorporated under sec 2(62)
of the Companies Act, 2013. In such a company the principle shareholder is the virtual owner running
the business with limited liability and other members may have even one share.
Companies not for profit – These companies must obtain a license from the central government before
they are registered. They are limited liability but are not required to use the word Limited or private with
their names. They are formed promoting art, science, commerce, sports etc. Profits are applied towards
its objective and cannot be distributed among its members. 1. It enjoys various exemptions on
registration. 2. It does not pay stamp duty for registration of Memorandum and Articles of Association.
3. It can be formed without share capital 4. Government can revoke license any time by giving a notice
“All agreements are not contract, but all contracts are agreements” – Explain.
1. Insurable interest: in order to claim for a loss or damage, the insured must have a financial interest
in the insured property. A person can be said to have an insurable interest in the property insured
when he suffers a loss if the property is lost or damaged or when he gains a profit when the property
insured is safe and is in continuous existence. Every person who is engaged in a marine adventure is
said to have an insurable interest. Example: interest of the shipowner in his ship, an interest of master
and crew for there wages, an interest of the insurance company in the property insured.
2. Utmost good faith: a contract of marine insurance is a contract based upon utmost good faith and if
the utmost good faith is not exercised by either party, the contract may be avoided by the other party.
The duty of utmost good faith is required by both the parties. The insurer must deal with all claims
fairly and expeditiously and must be able to pay for potential claims. The assured must disclose all
material facts about the condition of the insured property which the insurer knows or ought to know.
Material facts are those facts which could affect the judgment of a prudent underwriter in deciding
whether to accept the risk of insuring the property and at what rate of premium and to what terms
and conditions.
3. Indemnity: an insurance contract is a contract of indemnity. Such an insurance contract will make
good a loss or damage in such a manner that the assured is neither better-off nor worse-off as a result
of the loss. In other words, the assured is placed in the same financial position as he was in
immediately before the loss. Thus the principle of indemnity prevents the insurer from making a
profit out of his loss or gaining any benefit out of the insurance.
4. Subrogation: it is the right of the insurer, after he pays for the loss, to assume the rights of the
insured to recover this loss from the responsible party. This prevents the insured from collecting the
claims twice, thus reducing the cost of claims. The insurer can sue a responsible party in the name of
the insured up to the amount of the settlement.
Note: If a carrier refuses to carry the goods of a person without the above mentioned reasons, he can
be sued and the customer can recover damages.
2. He must carry the goods over the usual and ordinary route and take all reasonable precautions for their
safe carriage. He must not change the usual route unless necessary by exceptional circumstance.
3. He must deliver the goods at the agreed time and if no time had been fixed, within a reasonable time. The
place of delivery is subject to contract.
4. According to Common Law, he is an insurer of the goods because he warrants carrying the goods safely
and securely, and he is bound to indemnify the owner for loss or damage to the goods in course of carriage.