100 Sample Questions on the Indian Contract Act

PAPER NAME: BUSINESS LAW

B.COM

UNIT-1ST

1. An agreement enforceable at law is a

(a) enforceable acceptance

(b) accepted offer

(c) approved promise

(d) contract

2. Every promise and every set of promises, forming the consideration for each other, is an

(a) agreement

(b) contract

(c) offer

(d) acceptance.

3. Promises which form the consideration or part of the consideration for each other are called

(a) reciprocal promises

(b) cross offers

(c) conditional offer

(d) conditional promises.

4. An agreement not enforceable by law is stated to be void under

(a) section 2(d)

(b) section 2(e)

(c) section 2(f)

(d) section 2(g).

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5. Void agreement signifies

(a) agreement illegal in nature

(b) agreement not enforceable by law

(c) agreement violating legal procedure

(d) agreement against public policy.

6. Offer as defined under section 2(a) is

(a) communication from one person to another

(b) suggestion by one person to another

(c) willingness to do or abstain from doing an act in order to obtain the assent of other thereto

(d) none of the above.

7. Under section 2(b) if the person to whom the proposal is made signifies his assent the proposal is said to have been

(a) accepted

(b) agreed

(c) provisionally agreed

(d) tentatively accepted.

8. A proposal when accepted becomes

(a) promise under section 2(b)

(b) agreement under section 2(e)

(c) contract under section 2(h)


9. When, at the desire of the promisor, the promisee or any other person has done or abstained from doing or, does or abstain from doing or promises to do or to abstain from doing something, such act or abstinence or promise under section 2(d) is called

(a) reciprocal promise

(b) consideration for the promise

(c) counter offer

(d) acceptance.

10. Promises which form the consideration or part thereof, for each other under section 2(F) are called

(a) acceptances for different proposals

(b) agreements

(c) reciprocal promises

(d) consideration.

11. Every promise or set of promises forming the consideration for each other under section 2(e) is called

(a) reciprocal promise

(b) contract

(c) agreement


12. An agreement enforceable by law at the instance of one party & not of other party under section 2(i) is called

(a) a valid contract

(b) an illegal contract

(c) void contract

(d) a voidable contract.

13. Which is correct

(a) proposal + acceptance = promise

(b) promise + consideration = agreement

(c) agreement + enforceability = contract

(d) all the above.

14. In a valid contract, what comes first

(a) enforceability

(b) acceptance

(c) promise

(d) proposal.

15. Under section 2(c) promisor is the

(a) person who makes the proposal

(b) person who accepts the proposal

(c) person who makes the promise

(d) person to whom the proposal is made.

16. Under section 2(c) promisee is the

(a) person who makes the proposal

(b) person who accepts the proposal

(c) person who makes the promise

(d) person to whom proposal is made.

17. Goods displayed in a shop with a price tag is an

(a) offer

(b) invitation to offer

(c) counter offer


18. Tender is

(a) an offer

(b) an invitation to offer

(c) a counter offer

(d) a promise.

19. Communication of a proposal is complete

(a) when it is put in the course of transmission

(b) when it comes to the knowledge of the person to whom it is made

(c) when the proposal is communicated to the person to whom it is made

(d) all the above.

20. Communication of acceptance is complete as against the proposer

(a) when it comes to the knowledge of the proposer

(b) when it is put in the course of transmission to him so as to be out of power of the acceptor

(c) when the acceptance is communicated to the proposer

(d) all the above.

21. Communication of acceptance is complete as against the acceptor

(a) when it comes to the knowledge of the proposer

(b) when it is put in the course of transmission

(c) when it is communicated to the acceptor that the acceptance has reached the proposer

(d) when the proposer conveys the acceptance to the acceptor.

22. Revocation of offer by letter or telegram can be complete

(a) when it is despatched

(b) when it is received by the offeree

(c) when it reaches the offeree

(d) both (a) and (c).

23. Acceptance to be valid must

(a) be absolute

(b) be unqualified

(c) both be absolute & unqualified

(d) be conditional.

24. A contract with or by a minor is a

(a) valid contract

(b) void contract

(c) voidable contract

(d) voidable at the option of either party.

25. A contract which ceases to be enforceable by law becomes void

(a) when it ceases to be enforceable

(b) before it ceases to be enforceable

(c) no such condition necessary

(d) none of above.

26. An acceptance can be revoked

(a) at any time before the communication of acceptance is complete as against the promisee

(b) after its acceptance comes to the knowledge of the promisee

(c) both (a) & (b)

(d) neither (a) nor (b).

27. A proposal stands revoked

(a) by communication of notice of revocation by the proposer

(b) by failure of acceptor to fulfil a condition precedent

(c) by death or insanity of proposer to the knowledge of acceptor

(d) all the above.

28. A proposal can be accepted

(a) by notice of acceptance

(b) by performance of condition of proposal

(c) by acceptance of consideration for a reciprocal promise

(d) all the above.

29. Enforceable agreements are the one

(a) made by free consent

(b) parties to the contract are competent to enter into an agreement

(c) having lawful consideration & lawful object

(d) all the above.

30. Competency to contract relates to

(a) age of the parties

(b) soundness of mind of the parties

(c) both age & soundness of mind

(d) intelligence of the parties.

31. Which one of the following is correct

(a) past consideration is no consideration

(b) consideration can be past, present or future

(c) consideration can only be present

(d) consideration can only be present & future.

32. Past consideration is valid in

(a) England only

(b) India only

(c) both in England & India

(d) neither in England nor in India.

33. An agreement not to raise the plea of limitation is

(a) valid & binding

(b) void

(c) voidable

(d) illegal.

34. A letter of acceptance sent by post is lost in transit

(a) there is a concluded contract as the letter of acceptance is put in the course of transmission

(b) there is no concluded contract as the acceptance has not come to the knowledge of the proposer

(c) there is no concluded contract as the acceptance has not been communicated to the proposer

(d) all the above.

35. When the consent to the contract is caused by coercion, the contract under section 19 is

(a) valid

(b) voidable

(c) void

(d) illegal.

36. A's son forged B's name to a promissory note. B under threat of prosecuting A's son obtains a bond from A for the amount of the forged note. If B sues on this bond the court

(a) has no jurisdiction in this case

(b) must not set aside the bond

(c) may set aside the bond

(d) none of above.

37. When the consent is caused by misrepresent-tation, the contract under section 19 is

(a) valid

(b) void

(c) voidable

(d) illegal.

38. When the consent is caused by undue influence, the contract under section 19A is

(a) valid

(b) void

(c) voidable

(d) illegal.

39. Where both the parties are under mistake as to matter of fact, the contract under section 20 is

(a) voidable

(b) void

(c) valid

(d) illegal.

40. Where one of the parties is under a mistake as to matter of fact the contract is

(a) valid

(b) void

(c) voidable

(d) illegal.

41. Considerations & objects are unlawful where it is


(a) forbidden by law or defeat the provision of any law

(b) which is fraudulent

(c) which is immoral & against the public policy

(d) all the above.

42. If only a part of the consideration or object is unlawful, the contract under section 24 shall be

(a) valid

(b) voidable

(c) void

(d) illegal.

43. A contract without consideration under section 25 is

(a) valid

(b) voidable

(c) void

(d) illegal.

44. Consideration should be something in return of promise which

(a) both the law and parties regard, as having some value

(b) only law regards a having some value

(c) only the parties regard some value

(d) only adequate value necessary.

45. If the proposer prescribes the mode & manner of acceptance, the acceptance

(a) can be in any manner & mode

(b) should be in the manner & mode prescribed

(c) can be in any reasonable mode & manner


(d) all the above.

46. Parties are not competent to contract if any of them is

(a) minor

(b) insane

(c) declared unqualified

(d) all the above.

47. Consent is free under section 14 if not caused by

(a) coercion & undue influence

(b) fraud and misrepresentation

(c) mistake subject to the provisions of sections 20, 21 and 22

(d) all the above.

48. Consent under section 13 means

(a) agreeing on the same thing in the same sense

(b) agreeing on the same thing at the same time

(c)agreeing on the same thing at different time

(d) agreeing on different things at different times.

49. A contract which is valid initially however, ceases to be enforceable subsequently, the contract

(a) remains valid

(b) becomes voidable when enforceable

(c) becomes void when it enforceable

(d) becomes void since inception.

50. Agreements, the meaning of which is not certain or not capable of being made certain under section 29 is

(a) void

(b) voidable

(c) illegal

(d) valid

51. An agreement in restraint of trade under section 27 is

(a) valid

(b) voidable

(c) void

(d) unenforceable

52. An agreement restraint of trade is valid under section 27 if relates to

(a) sale of goodwill

(b) mutual adjustment

(c) business contingency


53. An agreement not to pursue any legal remedy to enforce the rights under section 28 is

(a) valid

(b) voidable

(c) void

(d) unenforceable.

54. An agreement not to persue legal remedies but to refer the dispute to the arbitrator, under section 28 is

(a) valid

(b) voidable

(c) void

(d) unenforceable.

55. An agreement to refer the dispute to the arbitrator is valid

(a) in respect of disputes already arisen

(b) in respect of disputes which may arise in future

(c) both (a) & (b)

(d) neither (a) nor (b)

56. An agreement by way of wager under section 30 is

(a) void

(b) voidable

(c) valid

(d) unenforceable

57. An agreement in connection with horse- racing under section 30 is

(a) unlawful

(b) void

(c) voidable

(d) valid.

58. An agreement in restraint of marriage under section 26 is

(a) void

(b) voidable

(c) valid

(d) unenforceable

59. If only a part of the consideration or object is unlawful, the contract under section 24 shall be

(a) valid to the extent the same are lawful

(b) void to the extent the same are unlawful

(c) void as a whole

(d) valid as a whole.

60. An agreement shall be void on account of

(a) mistake of fact by one party

(b) mistake of fact by both the parties

(c) mistake of foreign law

(d) both (a) & (b).

61. Coercion which vitiates free consent under section 15 is

(a) committing or threatening to commit any act which is forbidden by law

(b) committing or threatening to commit any act which is forbidden by Indian Penal Code

(c) unlawful detaining or threatening to detain any property with an intention to causing any person to enter into an agreement

(d) all the above.

62. What is correct of a standard form contract

(a) it is a valid contract

(b) one party has no choice but to accept & sign the contract

(c) both (a) & (b)

(d) the consent is not a free consent.

63. Law of contract primarily

(a) specifies the circumstances in which promises are binding on the parties to the contract

(b) lays down certain norms by which the parties are bound

(c) lays down the circumstances under which a promise may be made

(d) all the above.

64. Misrepresentation under section 18 means

(a) a positive assertion, in a manner not warranted by the information of the person making it, not true but he believes it to be true

(b) any breach of duty, which gains an advantage to the person committing it, by misleading another to his prejudice

(c) causing a party to make an agreement to make a mistake as to the subject matter of contract

(d) all the above.

65. A person is deemed to be in a position to dominate the will of another by undue influence if the mental capacity is affected temporarily or permanently by

(a) reason of age

(b) reason of illness

(c) mental or bodily distress

(d) all the above.

66. An agreement to remain unmarried is

(a) valid

(b) voidable

(c) void

(d) unenforceable.

67. A general offer open for world at large can be accepted

(a) by sending a communication of acceptance

(b) by complying with the conditions of offer

(c) by tendering himself to comply the conditions of offer


68. The term consensus ad-idem means

(a) general consensus

(b) reaching an agreement

(c) meeting of minds upon the same thing in( the same sense

(d) all the above.

69. Which one of the following does not amount to fraud

(a) suggestion as a fact which is not true, by one who does not believe it to be true

(b) active concealment of a fact

(c) a representation made without knowing it to be false, honestly believing it to be true

(d) a promise made without any intention of performing it.

70. Contract without consideration made in writing & registered and made on account of natural love and affection is

(a) void

(b) voidable

(c) valid

(d) unenforceable.

71. Inadequacy of consideration does not make the contract

(a) void

(b) voidable

(c) unenforceable

(d) neither void nor voidable.

72. Inadequacy of consideration is relevant in determining the question of

(a) fraud

(b) misrepresentation

(c) undue influence

(d) free consent.

73. Agreement without consideration is valid

(a) when made out of love & affection due to near relationship

(b) when made to compensate a person who has already done something voluntarily

(c) when made to pay a time barred debt

(d) all the above.

74. A contract based on the happening or non- happening of a future event under section 31 is called

(a) a contingent contract

(b) a wagering contract

(c) a contract marked with uncertainty and hence void


75. A contingent contract to do or not to do anything on the happening of an uncertain future event under section 32

(a) is never enforceable

(b) becomes enforceable only on the happening of that event

(c) enforceable since the time of making it

(d) becomes enforceable in the immediate possibility of happening of that event.

76. A contingent contract

(a) is void

(b) never becomes void

(c) becomes void when the event becomes impossible

(d) is voidable.

77. A contingent agreement based on an impossible event under section 36

(a) is void

(b) is void till the impossibility is known

(c) becomes void on the knowledge of impossibility

(d) all the above.

78. What is true of misrepresentation

(a) it is the same thing as fraud

(b) it renders the contract voidable

(c) it may be due to innocence

(d) both (b) & (c).

79. Two persons have the capacity to contract under section 11

(a) if both are major

(b) if both are not of unsound mind

(c) if none is declared unqualified to contract

(d) all are correct.

80. A contract with minor is

(a) voidable at the instance of the minor

(b) voidable at the instance of other party

(c) void

(d) valid.

81. An agreement to do an act impossible in itself under section 56 is

(a) void

(b) valid

(c) voidable

(d) unenforceable.

82. A contingent contract based on the specified uncertain event happening within a fixed time under section 35

(a) remains valid even if the event does not happen within that fixed time

(b) becomes void at the expiration of the time fixed

(c) becomes void if the happening of that event becomes impossible before the expiry of time fixed

(d) both (b) & (c).

83. A contingent contract based on the specified uncertain event not happening within a fixed time under section 35

(a) can be enforced if the event does not happen within the time fixed

(b) can be enforced if before the expiry of time fixed, it becomes certain that such an event shall not happen

(c) cannot be enforced at all, being void

(d) both (a) & (b).

84. A promisor can perform

(a) the promise himself

(b) the promise through his representa-tive competent to perform

(c) the promise through his representa-tive irrespective of the competency of that representative

(d) both (a) & (b).

85. A promisee can accept the performance

(a) from the promisor himself

(b) from the representative of the promisor competent to perform

(c) from a third person

(d) all the above.

86. In case of joint promise, generally the performance must be by

(a) all the promisors jointly

(b) any one of them individually

(c) one not authorised to perform


87. In cases of joint promise generally a promisee can compel

(a) all the joint promisors to perform

(b) any one of them to perform

(c) some of them to perform

(d) all the above.

88. Generally, the joint promisors can

(a) compel each other to contribute equally

(b) not to compel each other to contribute equally

(c) cannot compel each other to contribute


89. Where one of the joint promisors makes a default in contribution of performance

(a) the other joint promisors have no right against the defaulter

(b) have to bear the loss in equal share

(c) not supposed to bear the loss

(d) the contract becomes void to that extent.

90. In case of default by joint promisors the promisee

(a) can sue any one of them for the entire promise

(b) can sue any one of them to the extent of his share in the joint promise

(c) both (a) & (b)

(d) cannot sue any single promisee.

91. In case of death of a joint promisor(s) the promisee

(a) can enforce the contract against the survivor(s) of the said joint promisor(s) alongwith the joint promisors who are alive

(b) cannot enforce the contract against the survivor(s) of the said joint promisor(s)

(c) both (a) & (b)

(d) cannot enforce the contract against any of them.

92. In a contract not specifying the time for performance, the promisor can perform the contract

(a) within any time howsoever long it may be

(b) within the shortest time

(c) within a reasonable time


93. What is a reasonable time for performance of a contract

(a) is a question of fact

(b) is a question of law

(c) is a mixed question of fact & law

(d) is a question of prudence.

94. A contract not specifying the place of performance

(a) performed at any place to the knowledge of the promisee

(b) the promisor has to apply to the promisee for appointment of a place of performance & perform the promise at that place

(c) the promisor need not seek any instructions from the promisee as to the place of performance

(d) the promisor can perform the promise at a place other than the place appointed by the promisee.

95. In case the promisee prescribes the manner and time of performance of promise

(a) the performance must be in the manner and at the time prescribed

(b) the performance can be in a different manner but at the time prescribed

(c) the performance can be in the manner prescribed but at a time beyond the time prescribed

(d) the performance need not be in the manner and time prescribed.

96. If the time of performance of the contract is the essence of the contract and the promisor fails to perform the contract by the specified time

(a) the contract becomes void

(b) the contract remains valid

(c) the contract becomes voidable at the instance of the promisee

(d) the contract becomes unenforceable.

97. If the time is not the essence of the contract the failure to perform the contract by the specified time makes the contract

(a) void

(b) voidable at the instance of the promisee

(c) remains valid but the promisee can claim compensation for the loss suffered by him by such failure

(d) remains valid & can be performed at any subsequent time without being liable for the loss suffered by the promisee.

98. In contract for sale of immovable property the presumption is that the time is

(a) the essence of the contract

(b) not the essence of the contract

(c) the essence of the contract but failure does not make the contract voidable

(d) not the essence of the contract but makes the contract voidable at the instance of the other party.

99. Reciprocal promises provide for doing certain things which are legal & certain others which are illegal, under section 57

(a) the entire set of promises is void

(b) the first set is voidable, but the second set is void

(c) the first set is valid but the second set is void

(d) the entire set of promises is valid.

100. A contract, performance of which becomes impossible or unlawful becomes

(a) void when the performance becomes unlawful or impossible

(b) void

(c) voidable when the performance becomes impossible.

(d) neither becomes void nor voidable

ANSWER KEY UNIT-1ST

1 D 34 D 67 C2 B 35 B 68 C3 A 36 D 69 C4 A 37 C 70 C5 A 38 C 71 D6 C 39 A 72 D7 A 40 C 73 D8 A 41 D 74 A9 B 42 B 75 B10 D 43 B 76 C11 B 44 D 77 C12 D 45 A 78 C13 D 46 D 79 C14 A 47 D 80 B15 A 48 A 81 D16 D 49 C 82 D17 A 50 C 83 C18 B 51 A 84 A19 B 52 B 85 C20 A 53 D 86 B21 C 54 D 87 A22 B 55 C 88 A

23 A 56 B 89 B24 D 57 A 90 C25 A 58 A 91 A26 C 59 A 92 C27 D 60 B 93 D28 D 61 D 94 B29 D 62 A 95 A30 C 63 D 96 A31 B 64 A 97 C32 B 65 D 98 D33 C 66 C 99 C

100 A

UNIT-2ND

1. The Limited Liability Partnership Act, 2008 (6 of 2009) is an Act to make provisions for the

(a) formulation and regulation of General Partnership Firms and Limited Liability formed under Indian Partnership Act, 1932

(b) formulation and regulation of Joint Ventures with unlimited liability formed under Indian Contract Act, 1872

(c) formulation and regulation of Chit Funds Organisations with unlimited liability formed under the Chit Funds Act, 1982

(d) formation and regulation of Limited Liability Partnership with limited liability formed under the Limited Liability Partnership Act, 2008.

2. Foreign Limited Liability Partnership (FLLP) under the Limited Liability Partnership Act, 2008 means

(a) a Limited Liability Partnership formed, incorporated or registered in that country to which the partners belong

(b) a Limited Liability Partnership formed, incorporated or registered under Economic Council of UNO

(c) a Limited Liability Partnership formed, incorporated or registered in Indian territory

(d) a Limited Liability Partnership formed, incorporated or registered outside India which establishes a place of business within India.

3. Every Limited Liability Partnership as per the Limited Liability Partnership Act, 2008 shall have at least two Designated Partners (DPs) who are individuals and

(a) at least one among them shall be resident in India

(b) both of them shall belong to one family residing in India

(c) both of them should be non-resident Indians (NRIs)

(d) both of them should belong to a single country outside India.

4. Prior to the Indian Partnership Act, 1932 which came into force from 1 October, 1932 except section 69 which came into force from 1 October, 1933, the law of partnership was provided in

(a) Sale of Goods Act, 1930

(b) Indian Contract Act, 1872

(c) Transfer of Property Act, 1908

(d) English Partnership Act, 1890.

5. Unilateral dissolution of partnership by partner who is minority shareholder is

(a) not permissible

(b) permissible

(c) permissible if all minority share-holders agree

(d) permissible if Memorandum of Association prescribes.

6. An act, to be called on 'act of a firm', within the meaning of section 2(a) of the Indian Partnership Act, 1932 is

(a) every act of the partners

(b) only such acts which give rise to a right enforceable by or against the firm

(c) such acts which do not give rise to a right enforceable by or against the firm

(d) either (a) or (b) or (c).

7. Any act or omission, to be an act of a firm, within the meaning of section 2(a) of the Indian Partnership Act, 1932 must be act or omission of

(a) all the partners

(b) any of the partner

(c) agent of the firm


8. Whether an act of a partner or agent can be regarded as an 'act of the firm' is a

(a) question of fact

(b) question of law

(c) mixed question of fact & law

(d) either (a) or (c).

9. The term 'business' has been defined under

(a) section 2(a)

(b) section 2(b)

(c) section 2(d)

(d) section 2(e).

10. Under section 2(b) of the Indian Partnership Act, business includes

(a) every trade and occupation

(b) every occupation and profession

(c) every trade, occupation and profession

(d) every trade and profession.

11. The term 'partnership' has been defined under

(a) section 3

(b) section 4

(c) section 5

(d) section 6.

12. Under section 4 of the Indian Partnership Act, partnership is a

(a) compulsory legal relation

(b) creation of the choice and voluntarily agreement between the concerned parties

(c) a relation arising from status


13. Which of the following enactments insist for a written agreement of partnership

(a) the Indian Partnership Act, 1932

(b) the Indian Contract Act, 1872

(c) the Indian Registration Act, 1908

(d) neither (a) nor (b) nor (c).

14. A partnership can be

(a) a general partnership

(b) a particular partnership

(c) either (a) or (b)

(d) only (a) and not (b).

15. Section 8 of the Indian Partnership Act, 1932 provides for

(a) a particular partnership

(b) a general partnership

(c) a partnership at will

(d) all the above.

16. The relation of partnership arises from contract and not from status, has been prescribed under

(a) section 4

(b) section 5

(c) section 6

(d) section 7.

17. Section 7 of the provides for

(a) partnership in undertaking

(b) general partnership

(c) partnership at will

(d) all the above.

18. A partnership firm is

(a) a distinct legal entity from its partners

(b) not a distinct legal entity from its partners

(c) a juristic person


19. For the purposes of income-tax, a partnership firm

(a) can be assessed as an entity distinct and separate from its partners

(b) cannot be assessed as an entity separate and distinct from its partners

(c) can be assessed as an entity distinct and separate from its partners only with the permission of the court

(d) can be assessed as an entity distinct and separate from its partners only if all the partners agree for the same.

20. A partnership cannot be constituted by

(a) two individuals

(b) two Hindu joint families

(c) both (a) and (b)

(d) neither (a) or (b).

21. The historic case laying down the test for determining the existence of a partnership is

(a) Grace v. Smith

(b) Waugh v. Carver

(c) Bloream v. Pell

(d) Cox v. Hickman.

22. The mode of determining the existence of partnership has been laid down in

(a) section 6

(b) section 5

(c) section 9

(d) section 10.

23. Which of the following in itself is not sufficient to constitute a partnership

(a) the sharing of profits by persons having a joint or common interest

(b) the receipt by a person of a share of the profits

(c) the receipt by a person of a payment varying with the profits earned by business

(d) all the above.

24. Which of the following is a valid partnership

(a) partnership between two partnership firm

(b) partnership between one partnership firm and an individual

(c) partnership between individual mental of one firm and the individual members oil another firm


25. A partnership firm is entitled to enter into a partnership with

(a) another firm

(b) Hindu undivided family

(c) an individual


26. Mutual agency among the partner is

(a) a test to determine the existence of a partnership

(b) a legal incidence of partnership



27. A Hindu undivided family is entitled to enter into an agreement of partnership with

(a) another joint Hindu family

(b) another partnership firm

(c) an individual


28. Which of the following is a valid partnership

(a) partnership between the Karta of a joint Hindu family in his representative capacity and an individual co-parcener of the same family

(b) partnership between two Hindu joint families

(c) partnership between a Hindu joint family and a partnership firm

(d) all the above.

29. Section 5 of the Indian Partnership Act, 1932 does not apply to

(a) Muslim Trading Family

(b) Christian Trading Family

(c) Burmese Buddhist husband and wife carrying on the business

(d) all the above.

30. Section 5 of the Indian Partnership Act, 1932 does not apply to

(a) Muslim Trading Family

(b) Christian Trading Family



31. The concept of partnership commensu-rate with

(a) principal and agent

(b) co-owners of property

(c) joint owners of property

(d) all the above.

32. A right to participate in profits, although strong but not a conclusive test of partnership. It was so held in

(a) Tellis v. Saldanha

(b) Cox v. Hickman

(c) Re: Stanton Iron Co.

(d) Grace v. Smith.

33. Which of the following is not an essential requisite for creating a partnership as per section 4

(a) an agreement to carry on a business

(b) sharing of profits

(c) sharing of losses

(d) business to be carried by all or any of them acting for all.

34. A person who has lent money to a person or firm engaged in a business and has agreed to take a proportion of the profits of the business in addition to or in lieu of his interest, does not by that reason alone becomes a partner, in the business, has been laid down in

(a) Badeley v. Consolidated Bank

(b) Janes v. Whitbread

(c) Marconis Wireless Telegraph Co. v. Newman

(d) Price v. Groom.

35. The Indian Partnership Act, 1932 provides for and recognises

(a) partnerships for a specified and fixed period

(b) partnerships for a specified and fixed venture



36. A partnership for which no period or duration is fixed, under the Indian Partnership Act, 1932 is known as

(a) general partnership

(b) partnership at will

(c) particular partnership

(d) co-ownership.

37. Under section 7 of the Indian Partnership Act, 1932, partnership at will is subject to

(a) one exception

(b) two exceptions

(c) three exceptions

(d) five exceptions.

38. Which of the following is an exception to the partnership at will, as provided under section 7 of the Indian Partnership Act, 1932

(a) where there is a provision for the duration of the partnership

(b) where there is a provision for determination of the partnership



39. Where a partnership firm is constituted for a fixed period and after the expiration of that term, the firm continues to carry on business, without any new agreement,

(a) the partnership stands extended till the new agreement is made

(b) the partnership becomes partnership at will

(c) the partnership becomes illegal

(d) the partnership stands dissolved on the date of expiry of the term and no partnership can be said to be in existence.

40. In a partnership at will

(a) a partner of a firm can retire from the firm at any time by giving a notice of his intention to retire to his co-partners

(b) a partner of a firm can dissolve the firm at any time by giving a notice of his intention to dissolve the firm to his copartners


(d) only (b) and not (a).

41. The test to determine whether the given partnership is a 'partnership at will' and 'whether the partnership could be dissolved by a single partner', has been laid down in

(a) Crawshay v. Maule

(b) Abbot v.Abbot

(c) Cuffe v. Murtagh

(d) Kurumuthu T. Chettiar v. EM. Mutliappa Chettiar.

42. For constituting a partnership within the meaning of section 4 of the Indian Partnership Act, 1932

(a) the business has to be of permanent nature

(b) the business can be of temporary nature

(c) it is immaterial as to whether the business is of temporary or permanent nature


43. The principles governing partners' mutual relations have been laid down in

(a) Chapter II of the Indian Partnership Act

(b) Chapter III of the Indian Partnership Act

(c) Chapter IV of the Indian Partnership Act

(d) Chapter V of the Indian Partnership Act.

44. General duties of partners have been laid down in

(a) section 9 of the Act

(b) section 10 of the Act

(c) section 11 of the Act

(d) section 13 of the Act.

45. Under section 9 of the Indian Partnership Act, 1932, in doing best for the common body

(a) a partner is regarded as a kind of trustee for the other partners

(b) a partner is liable to render the accounts to other partners in a fiduciary capacity



46. Under section 10 of the Indian Partnership Act, every partner is under a duty

(a) to indemnify the firm for any loss caused to it by his fraud in the conduct of the business of the firm

(b) to render true accounts and full information

(c) not to carry on any business other than that of the firm

(d) to be just and faithful to each other.

47. The rights and duties of partners inter se can be regulated and varied by the consent of the partners by virtue of

(a) section 14 of the Act

(b) section 13 of the Act

(c) section 12 of the Act

(d) section 11 of the Act.

48. Under section 11 of the Indian Partnership Act, 1932, in case of any conflict between the provision of the Act and the articles of the agreement, the articles of the agreement with it, will be

(a) valid

(b) invalid

(c) voidable at the instance of any of the partner

(d) viodable at the instance of a third party.

49. An agreement in restraint of trade in a partnership under section 11 of the Act is

(a) valid

(b) voidable

(c) void

(d) invalid.

50. Section 12 of the Indian Partnership Act, 1932 is

(a) a statement of rights of the partners in reference to the conduct of business

(b) a statement of duties of the partners in the conduct of the business

(c) a mixed statement of rights and duties of partners in reference to the conduct of the business


51. Section 12(c) of the Indian Partnership Act provides for a

(a) rule of majority

(b) rule of unanimity



52. The rule of majority contained in section 12(c) of the Indian Partnership Act, 1932 is applicable in

(a) trivial matters

(b) ordinary matters

(c) fundamental matters

(d) all the above.

53. The rule of unanimity contained in section 12(c) of the Indian Partnership Act, 1932 has a reference to

(a) fundamental matters

(b) ordinary matters

(c) trivial matters

(d) all the above.

54. The rights and duties of a partner contained in section 12 of the Indian Partnership Act, 1932 are

(a) subject to the provision of the Indian Partnership Act, 1932

(b) subject to a contrary arrangement between the partners

(c) subject to the provisions of the Indian Contract Act, 1872

(d) subject to the provisions of the Indian Trusts Act, 1882.

55. An agreement to carry on business in partnership in the future creates a partnership

(a) immediately on the agreement

(b) on the date mentioned in the agreement irrespective of whether the business has commenced or not on that date

(c) only on the date when the business is actually commenced

(d) never creates a partnership and any such agreement is void.

56. Whether a partnership exists or not is a

(a) question of fact

(b) question of law

(c) mixed question of fact and law


57. The maxim 'socii mei socius meu socius non est' means

(a) my partner's partner is not necessarily my partner

(b) my partner's partner is necessarily my partner

(c) the partnership has become illegal

(d) the partnerships stands dissolved by the 'act of God'.

58. The minimum number of persons required for a partnership is

(a) two

(b) five

(c) ten

(d) twenty.

59. The maximum number of partners in a partnership, has been provided under

(a) the Indian Partnership Act, 1932

(b) the Indian Companies Act, 1956

(c) the Indian Contract Act, 1872

(d) the Indian Trusts Act, 1882.

60. Under section 11 of the Indian Companies Act, 1956 for a non-banking business, the minimum number of partners can be

(a) ten

(b) twenty

(c) twenty-five

(d) thirty.

61. For a banking business, the maximum number of partners in a partnership, under section 11 of the Indian Companies Act, 1956, can be

(a) ten

(b) fifteen

(c) twenty

(d) twenty-five.

62. A partnership in which the number of partners exceeds than that allowed under section 11 of the Indian Companies Act, shall be

(a) valid

(b) voidable at the instance of any of the partners

(c) voidable at the instance of third parties

(d) illegal.

63. An illegal partnership

(a) can sue

(b) can be sued

(c) cannot be sued

(d) can sue and be sued.

64. The members of an illegal partnership

(a) have a remedy against each other for the partnership dealings and transactions

(b) have no remedy against each other for the partnership dealings and transactions

(c) have a remedy against each other for the partnership dealings and transaction only with the permission of the court


65. If the partners are equally divided on a issue, the rule is: 'in re comtnuni potior est conditio prohibentis', which means

(a) those who forbid a change must have their way

(b) those who do not forbid i.e., in favour of the change, must have their way

(c) the discussion on the issue be deferred for another day

(d) opinion on the issue be taken from an expert.

66. A partner has a right to have access to all the books of accounts etc., of the firm

(a) during the subsistence of the partnership

(b) during the proceedings for the dissolution of the firm

(c) after the dissolution of the firm

(d) all the above.

67. A partner has a right to examine the account books etc., of the firm

(a) himself

(b) through legal representatives

(c) through agent


68. A partner can examine the books etc., of the partnership firm

(a) as many number of times without any restriction

(b) once a year

(c) once a month

(d) once a week.


(a) a mixed statement of rights and duties of the partners

(b) a mixed statement of duties and liabilities of the partners

(c) a mixed statement of rights and liabilities of the partners

(d) a mixed statement of rights, duties and liabilities of the partners.

70. The rate of interest prescribed under section 13, where a partner, advances money beyond the amount of capital, for the business of the partnership, is

(a) six percent

(b) nine percent

(c) twelve percent

(d) fifteen percent.

71. Where a partner is entitled to interest on the capital subscribed, such interest is payable

(a) out of profits only

(b) out of capital if no profits

(c) out of capital if losses


72. Section 13(a) of the Indian Partnership Act, 1932 provides for

(a) payment of remuneration to a partner as a matter of right

(b) payment of remuneration to a partner only when there is an agreement to that effect between the partners

(c) non-payment of remuneration to a partner only when there is an agreement to that effect between the parties


73. Under section 13(b) of the Indian Partnership Act, 1932 all the partners are entitled to

(a) share the profits and losses in the ratio of their capital contributions

(b) share the profits and losses equally irrespective of any agreement between them to the contrary

(c) share the profits and losses equally in the absence of any agreement to the contrary between them

(d) share the profits and losses in the ratio of their personal efforts input.

74. Where a change occurs in the constitution of a firm and no new agreement is made

(a) the ratio of profit sharing shall become equal for all the partners

(b) the ratio of profit sharing shall remain the same to the extent to which it is consistent with the altered composition of the firm

(c) the ratio of profit sharing shall change in the ratio of capital contributions

(d) the ratio of profit sharing shall change in the ratio of personal efforts/labour input of the partners.

75. As a general rule, by virtue of section 13 of the Indian Partnership Act, 1932

(a) partner is not entitled to interest on the capital subscribed by him I

(b) partner is not entitled to interest on the| advance made over and above the share a. capital



76. As regards the capital contribution in the partnership business, the status of a partner is that of

(a) a creditor of the firm

(b) a partner of the firm

(c) an employee of the firm

(d) all the above.

77. The status of a partner, making advances to the firm for its business, over and above the capital subscribed, is that of

(a) a partner of the firm

(b) a creditor of the firm

(c) an employee of the firm

(d) both (a) and (b).

78.On the dissolution of the partnership

(a) the interest on capital ceases run whereas interest of advances keeping running upto the date of payment

(b) the interest on capital and the interest on advances cease to run

(c) the interest on capital keeps running upto the date of payment whereas interest on advances cease to run

(d) the interest on capital as well as on advances keeps running upto the date of payment.

79. Ordinarily, on the overdrawings by the partners from the firm

(a) no interest is chargeable

(b) interest is chargeable @ 6% p.a.

(c) interest is chargeable @ 9% p.a.

(d) interest is chargeable @ 12% p.a.

80. A partner has a right to indemnity for the acts done in

(a) the ordinary & proper conduct of the business

(b) an emergency


(d) only (b) and not (a).

81. The right to indemnity is lost on

(a) the dissolution of the partnership

(b) the death of the partner

(c) the retirement of the partner


82. Section 13(f) of the Indian Partnership Act, 1932 provides for

(a) indemnity in favour of the partner against the firm

(b) indemnity in favour of the firm against a partner

(c) indemnity in favour of the third parties against the firm

(d) all the above.

83. An action for indemnity against a partner can be brought by

(a) the firm only

(b) an individual partner



84. What constitutes the property of the firm has been dealt with in

(a) section 16

(b) section 15

(c) section 14

(d) section 13.


(a) exhaustive

(b) inclusive

(c) conclusive


86. Under section 14 of the Indian Partnership Act, 1932, the property thrown into the common stock at the commencement of the business

(a) becomes the property of the firm

(b) remains the individual property of the partners in the shares contributed by them

(c) becomes the individual property of the partners in equal shares irrespective of their contributions and profit sharing ratio


87. A property belonging to a partners an entering into a partnership and used for the purposes of partnership

(a) becomes the property of the firm

(b) remains the property of that partner

(c) becomes the property of the partner having highest share of capital contribution

(d) becomes the property of the partners in their profit sharing ratio.

88. All the benefits and liabilities arising out of a contract made on behalf of a partnership do not

(a) belong to the partnership if the contract has been performed before the dissolution of the firm

(b) belong to the partnership if the contract has been performed before the retirement of the firm

(c) belong to the partnership if the contract has been performed after the dissolution of the firm or retirement of a partner


89. The property of the firm includes all property

(a) acquired by or for the firm

(b) for the purpose or in the course of business of the firm

(c) property purchase with money belonging to the firm

(d) all the above.

90. When the property is purchased out of the partnership funds but in the name of an individual partner, it

(a) becomes an estate of the partner

(b) becomes a joint estate

(c) is a question of fact to be determined with reference to the intention of the partners

(d) is a question of law to be decided on legal principles.

91. When the personal property of a partner is being used in the business of the firm, it

(a) is a question of fact to be determined with reference to the partner's intention whether it has become the property of the firm

(b) becomes the joint estate

(c) remains an estate of the partner

(d) is a question of law to be decided on legal principles.

92. Under section 14 of the Indian Partnership Act, 1932, goodwill of the business is

(a) property of the firm

(b) property of the managing partner

(c) property of the partner having the highest share in the profits

(d) property of the partner having the lowest share in the profits.

93. Since the partnership property vests in all the partners and every partner has an interest in the property of the partnership, during the subsistence of partnership

(a) a partner can deal with the property as his own

(b) a partner can deal with a portion of the property upto his share in the partnership,

as his own

(c) a partner can deal with a specific item of the partnership property as his own

(d) a partner cannot deal with any particular property or any portion of the property as his own.

94. In a partnership property, a partner has

(a) something in the nature of personal ownership

(b) only certain rights


(d) either (a) or (b).

95. If a partner chooses to use any assets of the partnership for his own purpose, it gives rise to

(a) a civil liability of that partner

(b) a criminal liability of that partner



96. Where a partner is authorised to recover dues of the partnership & spend the same for the business of the partnership and if he does not deposit the money so collected in the bank the partner is

(a) guilty of criminal breach of trust

(b) accountable civilly to the other



97. Goodwill of the partnership business is the property of the partnership

(a) under section 14

(b) under section 15

(c) under section 16

(d) under section 17(b).

98. The term 'goodwill' is a thing very to describe but very difficult to define, is stated by

(a) Lord Herschell

(b) Lord Haldane

(c) Lord MacNaughten

(d) Lord Eldon.

99. Section 15 of the Indian Partnership Act provides that

(a) the property of the firm shall be held and used by the partners exclusively for the purposes of the business of the firm

(b) the property of the firm can be used by the partners for any of his/their personal use

(c) the property of the firm can be used by the partners for the personal use of all the partners


100. Section 15 of the Indian Partnership Act is a statement of a

(a) right of the partners

(b) duty of the partners

(c) privilege of the partners

(d) liability of the partners.

ANSWER KEY UNIT-2ND

1 A 34 A 67 D2 A 35 A 68 A3 A 36 A 69 D4 B 37 A 70 D5 D 38 A 71 D6 D 39 B 72 B7 A 40 B 73 A8 A 41 A 74 C9 A 42 C 75 A10 D 43 A 76 B11 B 44 A 77 A12 D 45 A 78 D13 B 46 A 79 B14 C 47 A 80 A15 C 48 C 81 A16 B 49 C 82 C17 B 50 A 83 B18 B 51 A 84 C19 D 52 C 85 C20 D 53 C 86 A21 A 54 A 87 A22 A 55 C 88 A23 D 56 A 89 B24 D 57 C 90 C25 D 58 A 91 A26 A 59 B 92 A27 D 60 A 93 A28 A 61 C 94 C29 D 62 D 95 A30 C 63 B 96 B31 D 64 C 97 A

32 D 65 D 98 A33 B 66 D 99 A

100 D

The Sale of Goods Act, 1930

1. The Sale of Goods Act, 1930 applies to the whole of India except

(a) Jammu & Kashmir

(b) Dadra and Nagar Haveli

(c) Goa, Daman & Diu

(d) all the above.

2. The Sale of Goods Act, 1930 came into force on

(a) 1st April, 1930

(b) 1st July, 1930

(c) 1st December, 1930

(d) 31st January, 1931.

3. The Sale of Goods Act, 1930 is based on

(a) the english Bills of Exchange Act, 1882

(b) the Transfer of Property Act, 1882

(c) the English Sale of Goods Act, 1893

(d) the Indian Contract Act, 1872.

4. The Sale of Goods Act, 1930 in its operationis

(a) prospective

(b) retrospective

(c) prospective in certain respects and retrospective in certain other respects

(d) only (c) and not (a) or (b).

5. In Sale of Goods Act several provisions of the Indian Contract Act have been retained

(a) to meet the need of the buyers

(b) to meet the need of the sellers

(c) to meet the need of both the buyers and sellers

(d) to meet special conditions existing in India regarding sale of goods.

6. The formalities attending the transfer of property in goods, under the conflict of laws, shall be governed by

(a) lex situs

(b) lex contractus

(c) lex fori

(d) locus regit actum.

7. Under the conflict of laws, the rights and obligations flowing out of a contract will be regulated by

(a) lex fori

(b) locus regit actum

(c) lex contractus

(d) lex situs.

8. The term 'buyer', under the Sale of Goods Act, 1930, has

(a) been defined under section 2(1)

(b) been defined under section 2(2)

(c) been defined under section 2(3)

(d) not been defined.

9. The term "goods" in the sale of goods means

(a) specific goods only

(b) ascertained goods only

(c) ownership

(d) subject matter.

10. The term 'delivery' has been defined, in the Sale of Goods Act, 1930 under

(a) section 2(3)

(b) section 2(2)

(c) section 2(1)

(d) section 2(4).

11. Under section 2(2) of the Sale of Goods Act, 1930, 'delivery' means

(a) gratuitous transfer of possession from one person to another

(b) involuntary transfer of possession from one person to another

(c) voluntary transfer of possession from one person to another

(d) transfer of possession irrespective of whether it is gratuitous, involuntary or voluntary, from one person to another.

12. 'Delivery' within the meaning of section 2(1) of the Sale of Goods Act, 1930, can be

(a) actual

(b) constructive

(c) symbolic


13. It has been remarked that the Sale of Goods Act has not proved one of the more successful pieces of codification undertaken by the Parliament, by

(a) P.S. Atiyah

(b) S.K. Kapoor

(c) Pollock & Mulla

(d) Justice Goda Raghuram.

14. Which of the following is an instance of constructive delivery of goods

(a) the transfer of bill of lading

(b) attornment by a person in possession of the goods


(d) only (b) and not (a). A bill of lading is

15. A bill of lading is

(a) a negotiable instrument like a bill of exchange

(b) a negotiable instrument like a promissory note



16. 'The documents of title to goods' in the Sale of Goods Act, 1930 have been described, under

(a) section 2(3)

(b) section 2(4)

(c) section 2(1)

(d) section (2).

17. The definition of 'the documents of title to goods' given in section 2(4) of the Sale of Goods Act, 1930, is

(a) exhaustive

(b) descriptive

(c) exhaustive and descriptive

(d) only (a) and not (b) or (c).

18. Which of the following documents is a document of title to goods

(a) bill of exchange

(b) promissory note

(c) dock warrant

(d) all the above.

19. Which of the following documents is a document of title to 'goods' within the meaning of section 2(4) of the Sale of Goods Act, 1930

(a) Warehouse keeper's certificate

(b) Warfinger's certificate



20. Under section 2(4) of the Sale of Goods Act, 1930, which of the following documents is not a document of title

(a) pucca delivery order enabling a person to obtain delivery on payment of price

(b) mate's receipt



21. 'Future goods' has been defined, in the Sale of Goods Act, 1930, under

(a) section 2(5)

(b) section 2(6)

(c) section 2(7)

(d) section 2(8).

22. Under section 2(6) of the Sale of Goods Act, 1930 'future goods' means

(a) goods which are not yet in existence

(b) unascertained goods

(c) ascertained goods

(d) specific goods

23. The term 'goods' has been defined in the Sale of Goods Act, 1930, under

(a) section 2(5)

(b) section 2(6)

(c) section 2(7)

(d) section (8).

24. The definition of 'goods' as given in section 2(7) of the Sale of Goods Act, 1930, is the same as given

(a) of movable property under the General Clauses Act, 1897

(b) of movable property under the Transfer of Property Act, 1882

(c) of movable property under the Indian Contract Act, 1872

(d) Neither (a) nor (b) nor (c).

25. The definition of 'goods' under section 2(7) of the Sale of Goods Act, 1930 is

(a) descriptive

(b) exhaustive

(c) exhaustive and descriptive

(d) declaratory.

26. 'Goods' within the meaning of section 2(7) of the Sale of Goods Act, 1930 includes

(a) actionable claim(s)

(b) money



27. Section 2(7) of the Sale of Goods Act, 1930, the term 'goods' does not include

(a) stock and share

(b) growing crops

(c) grass


28. Which of the following are 'goods' within the meaning of section 2(7) of the Sale of Goods Act, 1930

(a) things attached to land which are agreed to be severed before sale

(b) things forming part of the land agreed to be severed before sale



29. Transfer of actionable claim(s) is governed by

(a) The Transfer of Property Act, 1882

(b) The Sale of Goods Act, 1930

(c) The Indian Contract Act, 1872

(d) all the above.

30. 'A person is said to be 'insolvent' who has ceased to pay his debts in the ordinary course of business, or cannot pay his debts as they become due whether he has committed an act of insolvency or not', is the definition of insolvency given in

(a) The Indian Partnership Act, 1932

(b) The Sale of Goods Act, 1930

(c) The Indian Contract Act, 1872

(d) all the above.

31. Who is 'insolvent', has been stated in the Sale of Goods Act, 1930, under

(a) section 2(6)

(b) section 2(7)

(c) section 2(8)

(d) section 2(9).

32. The Sale of Goods Act, 1930

(a) does not define the term mercantile agent

(b) defines the term mercantile agentunder section 2(9)

(c) defines the term mercantile agentunder section 2(10)

(d) defines the term mercantile agent under section 3.

33. The question of the insolvency of a buyer, under the Sale of Goods Act, 1930, is of importance in connection with

(a) the seller's lien on the goods

(b) the right of stoppage in transit



34. "Mercantile agent" means the person

(a) who sell goods, or consigns for the purpose of sell, or buy goods or raise money on security of goods

(b) who only sell or purchase

(c) who only consign goods

(d) who only transfer goods.

35. 'Price' under section 2(10) of the Sale of Goods Act, 1930, means

(a) the money consideration

(b) the consideration given in the form of goods

(c) partly money consideration and pa; consideration in goods


36. The term 'property' has been defined, in the Sale of Goods Act, 1930 under

(a) section 2(9)

(b) section 2(10)

(c) section 2(11)

(d) section 2(12).

37. The word "Property" in the Sale of Goods Act, 1930 means

(a) seller or transferer

(b) buyer or purchaser

(c) goods or subject matter

(d) ownership or title.

38. Under section 2(11) of the Sale of Goods Act, 1930, the property in goods means

(a) the general property or ownership ii goods

(b) the specific property or ownership ii goods



39. The propositions are

I. The general property in goods can be with one person while the special property in the same goods be with the another person.

II. The transfer of general property in goods to one person can be done subject to a special property in the same goods in another person.

III. The special property in goods can be only with the person having general property goods.

In respect of the aftersaid proposition which of the following is true

(a) I is correct, II & III are incorrect

(b) I & II are correct, III is incorrect

(c) I & III are correct, II is incorrect

(d) II & III are correct, I is incorrect.

40. 'Quality of goods' under section 2(12) of the Sale of Goods Act, 1930 has a reference

(a) fitness for a particular purpose

(b) state or condition

(c) description


41. The term 'Specific goods' has been defined in the Sale of Goods Act, 1930, under

(a) section 2(12)

(b) section 2(15)

(c) section 2(13)

(d) section 2(14).

42. Under section 2(14) of the Sale of the Goods Act, 1930, 'specific goods' means

(a) goods which are capable of identification

(b) generic goods

(c) goods identified and agreed upon


43. Which of the following are not goods within the meaning of section 2(7) of the Sale of Goods Act, 1930

(a) jubilee coins

(b) coins of antiquity

(c) current coins Sold as curiosity


44. Seller means a person

(a) who sells or agrees to sell goods

(b) who only sells good

(c) who only agrees to sell goods

(d) none of above.

45. Contract of Sale under section 4 of the Sale of Goods Act, 1930 comprises of

(a) executory contract of sale

(b) executed contract of sale

(c) both executory and executed contracts of sale


46. The Fixed Deposit Receipts (FDRs) are goods within the meaning of section 176 of the Indian Contract Act, 1872 and section 2(7) of the Sale of Goods Act, 1930. The statement is

(a) false

(b) ambigous

(c) partly true

(d) true.

47. In a contract of sale of goods, under section 4 of the Sale of Goods Act, 1930, there

(a) must be transfer of absolute or general property in the goods

(b) must be a transfer of special property in the goods

(c) must be transfer of either absolute or special property in the goods


48. Whether a given contract is one of sale or some other kind of contract, in respect of goods, it is a question of

(a) form

(b) substance

(c) terminology

(d) both form and substance.

49. A contract of sale under section 4 of the Sale of Goods Act, 1930

(a) may be absolute

(b) may be conditional



50. The judgment of the Supreme Court in Indian Steel and Wire Products v. State of Madras, AIR 1968 SC 478, is a decision on

(a) sale and statutory transaction

(b) contract of sale and contract for work or service

(c) contract of sale and hire-purchase

(d) contract of sale and bailment.

ANSWER KEY UNIT-UNIT-3RD

1 D 34 A2 A 35 B3 B 36 A4 A 37 C5 A 38 B6 B 39 A7 C 40 D8 A 41 D9 C 42 D10 A 43 B11 C 44 A12 A 45 C13 A 46 D14 C 47 A15 D 48 D16 A 49 D17 B 50 C18 C19 C20 B21 B22 A23 C24 C25 C26 A27 A28 A29 B30 B31 D32 D33 A

UNIT-4 th

The Negotiable Instruments Act, 1881 1. The Negotiable Instruments Act, 1881 applies to

(a) the whole of India

(b) the whole of India except the State of Jammu and Kashmir

(c) those states as notified by the Union Government from time to time in the Official Gazette

(d) the whole of India except the State of Jammu and Kashmir and the North- Eastern States.

2. The Negotiable Instruments Act, 1881 came into force on

(a) 9th December, 1881

(b) 19th December, 1881

(c) 1st March, 1882


3. The undertaking contained in a promissory note, to pay a certain sum of money is

(a) conditional

(b) unconditional

(c) may be conditional or unconditional depending upon the circumstances


4. A bill of exchange contains a/an

(a) unconditional undertaking

(b) unconditional order

(c) conditional undertaking

(d) conditional order.

5. Cheque is a

(a) promissory note

(b) bill of exchange

(c) both (a) and (b) above

(d) None of the above.

6. The term "a cheque in the electronic form" is defined in the Negotiable Instruments Act, 1881 - under

(a) section 6(a)

(b) section 6(l)(a)

(c) explanation 1(a) of section 6

(d) section 6A.

7. The term 'Negotiable instrument' is defined in the Negotiable Instruments Act, 1881, under section

(a) 12

(b) 13

(c) 13A

(d) 2(d).

8. The term 'negotiation' in section 14 of the Negotiable Instruments Act, 1881 refers to

(a) the transfer of a bill of exchange, promissory note or cheque to any person, so as to constitute the person the holder thereof

(b) the payment by a bank on a negotiable instrument after due verification of the instrument

(c) the bargaining between the parties to a negotiable instrument

(d) all of the above.

9. If an instrument may be construed either as a promissory note or bill of exchange, it is

(a) a valid instrument

(b) an ambiguous instrument

(c) a returnable instrument


10.If in an instrument the amount undertaken or ordered to be paid is stated differently in figures and in words

(a)the instrument is void due to uncertainty

(b)the amount stated in figure shall be the amount undertaken or ordered to be paid

(c) the amount stated in words shall be the amount undertaken or ordered to be paid


11. Under section 16 of the Negotiable Instrument Act, 'indorsement in blank' of an instrument means

(a) where the indorser does not write anything on the instrument

(b) where the indorser signs his name only on the instrument

(c) where the indorser writes the name of the person who is directed to pay


12. 'At sight' under section 21 of the Negotiable Instrument Act, 1881, means

(a) on presentation

(b) on demand

(c) on coming into vision


13. A promissory note or bill of exchange which is not expressed to be payable on demand, at sight or on presentment is at maturity

(a) on the 30th day after the day on which it is expressed to be payable

(b) on the 3rd day after the day on which it is expressed to be payable

(c) on the 5th day after the day on which it is expressed to be payable

(d) on the 4th day after the day on which it is expressed to be payable.

14. If a minor draws, indorses, deliver or negotiates an instrument, such instrument binds

(a) all parties to the instrument including the minor

(b) only the minor and not other parties to the instrument

(c) all parties to the instrument except the minor


15. In a promissory note, the amount of money payable

(a) must be certain

(b) may be certain or uncertain

(c) is usually uncertain


16. An authority to draw bills of exchange

(a) itself import an authority to indorse

(b) does not itself import an authority to indorse

(c) sometime import an authority to indorse


17. The term 'legal representative' in section 29 of the Negotiable Instruments Act, 1881

(a) does not include executors or administrator (Rama v. Pravin, AIR 1926 Mad 389)

(b) includes executors or administrator (K. Subbanna v. K. Subbarayudu, AIR 1926 Mad 390)

(c) includes executors but does not include administrators (P. Nayar v. T. Ramanna, AIR 1929 Mad 389)

(d) includes only administrators but does not include executors (P.K. Pati v. Damodar Sahu, AIR 1953 Ori 179).

18. Can a drawer escape from his liability?

(a) no, a drawer can never escape from his liability

(b) yes, a drawer can limit or exclude his liability by inserting in the bill an express stipulation to that effect

(c) in certain cases although he can escape from his liability but always he cannot so escape


19. In which of the following case the elementary law is laid down that where there is no acceptance, no cause of action can have arisen to the payee against the drawee

(a) Khandas Narandas v. Dahiabhai, ILR 3 Bom 182 (183)

(b) Venkayya Pantulu v. Sun/a Prakasamma, AIR 1940 Mad 879

(c) Karak Rubber Co. Ltd. v. Burden, (1972) 1 All ER 1210

(d) K.A. Lona v. D.H. Ibrahim, AIR 1981 Ker 816 (DB).

20. A bill is drawn payable to 'A' or order. 'A' indorses it to 'B', the indorsement not containing the words '"or order" or any equivalent words. Can 'B' negotiate the instrument?

(a) yes

(b) no

(c) not always


21. Where an indorser of an instrument excludes his liability and afterwards becomes the holder of the instrument, who are liable to him?

(a) no one is liable to him

(b) all intermediate indorsers are liable to him

(c) only the immediate prior indorser is liable to him


22. Can the legal representative of a deceased person negotiate a promissory note, bill of exchange or cheque payable to order by delivery only which was indorsed by the deceased but not delivered by him?

(a) yes, the legal representative can negotiate the instrument by delivery only

(b) no, the legal representative can not negotiable an instrument by delivery only. He must re-indorse and deliver the instrument for negotiating it

(c) an instrument indorsed by a deceased person has no legal validity and is void


23. Can the holder of a negotiable instrument indorsed in blank convert the indorsement into an indorsement in full?

(a) no, such a conversion is not possible under the Negotiable Instruments Act, 1881 (Section 49)

(b) yes, the holder can, without signing his own name, and by writing above the indorser's signature a direction to pay to any other person as indorsee, convert the indorsement in blank into an indorsement in full (Section 49)

(c) yes, the holder can by signing his own name and by writing above the indorser's signature a direction to pay to any other person as indorsee, convert the indorsement in blank to an indorsement in full (Section 49)


24.The indorsement of a negotiable instrument followed by delivery

(a) transfers to the indorsee the property in the bill, provided the indorsement must be an indorsement in full

(b) does not transfer the property in the bill to anyone

(c) transfers to the indorsee the property in the bill

(d) transfers to the holder the property in bill.

25. When presentment for payment is to be made under section 65 of the Act?

(a) Presentment for payment can be made at any reasonable time.

(b) Presentment for payment must be made during the usual hours of business and, if at a banker's, within banking hours.

(c) There is no such stipulation on the time for presentment.


26. In determining reasonable time for the purpose of payment of a negotiable instrument

(a) public holidays are included

(b) public holidays are excluded

(c) only the holidays observed by the banks are excluded


27. The question of the reasonableness of the time for presenting a bill of exchange for payment is a

(a) question of law

(b) question of fact

(c) mixed question of law and fact


28. Under section 76(b) of the Negotiable Instruments Act, 1881, the engagement to pay must have been entered into

(a) at maturity (Mehar v. Hari Gaur, AIR 1935 Lah 666)

(b) after maturity (Sivaram v. Jayaram, AIR 1960 Mad 297 (DB)

(c) prior to maturity (Thakur Din v. Oudh Commercial Bank Ltd., AIR 1999 Oudh 16)


29. A note under section 99 of the Negotiable Instruments Act should contain among other things

(a) place of the notary

(b) charges of notary



30. A notice of protest under section 102 of the Negotiable Instruments Act, 1881

(a) may be given by the notary public who makes the protest

(b) must always be given by the notary public who makes the protest

(c) must be given by the holder


31. Under section 118 of the Negotiable Instruments Act, 1881, it is presumed, until the contrary is proved, that every transfer of a negotiable instrument was made

(a) after its maturity

(b) before its maturity

(c) at its maturity


32. To whom of the following, payment of the amount due on a promissory note, bill of exchange or cheque must be made in order to discharge the maker or acceptor

(a) holder of the instrument

(b) indorser of the instrument

(c) indorsee of the instrument


33. The provisions of section 87 of the Negotiable Instruments Act, 1881, are subject to the provisions of

(a) sections 20,48, 68 and 125 of the Act

(b) sections 20, 49, 68 and 122 of the Act

(c) sections 20, 49, 86 and 125 of the Act

(d) sections 20, 49, 66 and 125 of the Act.

34. Under section 118 of the Negotiable Instruments Act, the onus of proving absence of consideration in the execution of a negotiable instrument is on the

(a) indorser (Zohra Jan v. Rajan Bibi, 28 IC 402)

(b) executant (Zohra Jan v. Rajan Bibi, 28 IC 402)

(c) drawee (R.S. Rajeswara Sethupathi v. Chidambaram Chettiar, AIR 1938 PC 123)


35. Which of the following is not a justified round of dishonouring of cheque by anker?

(a) the cheque is post-dated and presented before the ostensible date

(b) the banker had sufficient funds, but the funds are not properly applicable towards the payment of the cheque

(c) if the cheque is altered in parts

(d) if the cheque is duly presented.

36. When the acceptor of an instrument is also a drawer, notice of dishonour is

(a) necessary (section 98A)

(b) not necessary [section 98(e)]

(c) not always necessary but under certain circumstances mentioned in section 98A of the Act, it is a must


37. Under section 97, of the Negotiable Instruments Act when the party to whom notice of dishonour is dispatched is dead, but the party despatching the notice is ignorant of his death, the notice is

(a) sufficient

(b) not sufficient

(c) null and void and has no effect


38. If the words "not negotiable" are used with special crossing in a cheque, the cheque is

(a) not transferable

(b) transferable

(c) negotiable under certain circumstances


39. Crossing of a cheque effects the

(a) negotiability of the cheque

(b) mode of payment on the cheque



40. What is the presumption under section 137 of the Negotiable Instruments Act, 1881?

(a) a negotiable instrument drawn in a foreign country is genuine

(b) the law of any foreign country regarding promissory notes, bills of exchange and cheques is same as that of India



41. Who among the following cannot cross a cheque?

(a) drawer

(b) holder

(c) banker

(d) foreigner.

42. As per section 147 of the Negotiable Instruments Act, 1881, every offence punishable under the Act are

(a) compoundable

(b) non-compoundable

(c) cognizable

(d) both (b) and (c) above.

43. Under the provisions of section 143 of the Negotiable Instruments Act, 1881, all offences under the Act are to be tried by

(a) any Judicial Magistrate

(b) Judicial Magistrate of the First Class or by a Metropolitan Magistrate

(c) only a District Judge


44. For what term of imprisonment an offender under section 138 of the Negotiable Instruments Act can be punished?

(a) for a term which may extend to two years

(b) for a term which may extend to one year

(c) for a term not exceeding three years


45. Dishonour by non-acceptance takes place

(a) when the bill is properly presented for acceptance, except where presentment is excused, but the drawee makes the default in accepting it

(b) when the Dill is properly presented for acceptance, except where presentment is excused, but the drawee makes the default in paying it

(c) when the bill is properly presented for payment, except where presentment is excused, but the drawee fails to accept it


46. The presumption as to the date of a negotiable instrument under section 118 is that, every negotiable instrument bearing a date was made or drawn

(a) prior to that date

(b) on such date

(c) may be on or prior to that date


47. In the absence of a contract to the contrary, the liability of the maker or drawer of a foreign negotiable instrument is regulated in all essential matters

(a) by the law of the place where the instrument is made payable (section 134)

(b) by the law of the place where the instrument is indorsed (section 134)

(c) by the law of the place where the instrument is made (section 134)


48. Chapter XVII was inserted into the Negotiable Instruments Act, 1881, by amendment of the Act in the year

(a) 1888

(b) 1988

(c) 1998


49. Chapter XVII contain sections

(a) 138 to 142

(b) 136 to 142

(c) 112 to 124


50. With effect from which date, the term of imprisonment under section 138 was increased to two years from one year?

(a) from 6-2-2002

(b) from 6-2-2003

(c) from 1-4-1989


51.Section 138 of the Negotiable Instruments

Act, 1881,................ mens rea

(a) partially excludes

(b) includes

(c) sometime includes


52.When a cheque has become invalid because of the expiry of the stipulated period, can it be re-validated by the drawer by alteration of dates?

(a) yes, the drawer can re-validate the cheque by alteration of dates

(b) no, the drawer cannot re-validate it by so alteration of dates

(c) although the drawer cannot revalidate the cheque, but the drawee can at his discretion revaliate it


53. For the purpose of attracting the provisions of section 138 of the Negotiable InstrumentsAct, 1881, a cheque has to be presented to the bank

(a) within a period of six months

(b) within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier

(c) within a period of 15 days from the date on which it is drawn


54.Cognizance of an offence under section 138 can be taken by a court only on a/an

(a) police report (section 142)

(b) complaint (section 142)

(c) application to the District Judge (section


55. Who should make a complaint to a court for the purpose of taking cognizance of an offence under section 138?

(a) the payer or as the case may be, the holder in due course of the cheque

(b) any person who is effected can make a complaint

(c) the payee with the written permission of the drawee


56. A complaint against an offence under section 138 of the Negotiable Instrument Act, 1881

(a) must be in writing (section 142) -

(b) may be oral or in writing (section 142)

(c) must be in writing containing a declaration by the drawee that he consents to such filing of the complaint (section 142)


57. In the trial of an offence under section 138 of the Negotiable Instruments Act, the provisions of sections 262 to 265 of the Code of Criminal Procedure

(a) shall apply (section 143)

(b) shall not apply (section 143)

(c) sometimes shall apply (section 143)


58. Under section 143 of the Negotiable Instruments Act, an endeavour shall be made to conclude the trial within.......................... months from the date of filing of the complaint.

(a) 9

(b) 3

(c) 6

(d) 12.

59. Can a 'notice in writing' envisaged in section 138(b) of the Negotiable Instruments Act, 1881, be sent by telegraph?

(a) no (V. Raju v. P. Subbarama Naidu, AIR 1931 Mad 301)

(b) yes [M.V. Muthuramlingam v. D. Narayanswamy, (1995) 3 Comp Cas 77 Mad]

(c) yes [A.B. Steels v. Krishna Finance, (1996) 86 Comp Cas 295 (Mad)]


60. The provision of section 147 of the Negotiable Instruments Act, 1881, that every offence punishable under this Act shall be compoundable was inserted by the

(a) amending Act of 1988

(b) amending Act of 1980

(c) amending Act of 2002


61. The liability under section 138 of the Negotiable Instruments Act, 1881, is

(a) strict liability

(b) vicarious liability



62. A Magistrate issuing a summons to an accused or a witness can send it

(a) by speed post

(b) by courier services

(c) by a courier services as are approved by a court of session


63. Under the Limitation Act, 1963 the period of limitation for filing a suit by the payee against the drawer of a bill of exchange which has been dishonoured by non- acceptance is

(a) 3 years from the date of the refusal to accept

(b) 2 years from the date of the refusal to accept

(c) 3 years from the date of the signing by the drawer

(d) 3 years from the date of presentment.

64. A post-dated cheque remaines only a bill of exchange till the date on its face and only from that date it becomes a cheque being payable on demand. The statement is-

(a) false [Anil Kumar Sawhney v. Gidshan Rai, (1993) 4 SCC 424]

(b) true [Anil Kumar Sawhneu v. Gidshan Rai, (1993) 4 SCC 424]

(c) true [Jogy David v. K.K. Babu, (1998) 94 CompCas 711 (Ker)]

(d) true [Punna Devi v. John Inpex Pvt. Ltd., (1996) 2 Bank CLR 482],

65. As per the provisions of section 93, when a cheque is dishoroured by non-acceptance or non-payment the holder

(a) may or may not give notice to the parties whom the holder seeks to make liable thereon

(b) must give notice to the parties whom the holder seeks to make liable

(c) must give notice to the parties whom the holder seeks to make liable, but after noting

(d) must not give any notice to anyone.

66. In which of the following case the Supreme Court held that "the persons who are sought to be made vicariously liable for a criminal offence under section 141 should be, at the time the offfence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company. Every person connected with the company shall not fall within the ambit of the provision"?

(a) National Small Industries Corporation Ltd. v. Harmeet Singh Paintal, (2010) 3 SCC 330

(b) State of Bihar v. Kalyanpur Cement Ltd., (2010) 3 SCC 274

(b) both (a) and (b)


67. The provisions regarding summary procedure relating to suits upon bills of exchange, huttdies and promissory notes are laid down in

(a) Order 37 of CPC

(b) Order 38 of CPC

(c) Order 39 of CPC


68. A protest must contain

(a) the name of the person for whom the instrument has been protested

(b) the name of the person against whom the instrument has been protested

(c) the instrument itself or its literal transcript

(d) all of the above.

69. A protest is made by

(a) the drawer

(b) the indorser

(c) a notary


70. Where a cheque is crossed generally the banker on whom it is drawn

(a) shall not pay it otherwise than to a banker

(b) shall not pay it otherwise than to the holder

(c) shall not pay it to a banker


ANSWER KEY UNIT-4th

1 B 34 C 67 B2 A 35 A 68 A3 B 36 D 69 D4 A 37 C 70 B5 D 38 A6 D 39 C7 D 40 D8 A 41 C9 A 42 A10 A 43 A11 C 44 C12 A 45 A13 A 46 A14 C 47 B15 A 48 A16 D 49 B17 B 50 B18 A 51 D19 A 52 B20 B 53 A21 B 54 C22 B 55 B23 B 56 A24 B 57 C25 A 58 B26 B 59 B27 B 60 C28 C 61 A29 A 62 C30 C 63 A31 C 64 B32 C 65 B33 C 66 A

UNIT-5TH

1. The term company is defined under which sec of the Act?

a) Sec 3 (1) b) Sec 4 (2) c) Sec 2 (4) d) Sec 1 (3)

2. Property of the company belongs to

a) Company b) Share holders c) Members d) Promoters

3. Which company shares can be freely transferable

a) Private Company b) Public Company c) Both (a) & (b) d) None of the above

4. Minimum number of members in case of public company

a) 1 b) 2 c) 5 d) 7

5. Minimum number of members in case of private company is

a) 1 b) 2 c) 3 d)

6. Maximum no. of members in case of private company is

a) 50 b) 100 c) 150 d) 200

7. Maximum no .of members in case of public company is

1) 0 b) unlimited c) 50 d) 100

8. The liability of members if company is limited by guarantee.

a) Unpaid value of shares b) Guarantee amount

c) Unlimited liability d) None of the above

9. The liability of members if company is limited by shares

a) Unpaid value of shares b) Guarantee amount

c) Unlimited liability d) None of the above

10. If the company failed to refund application money with in 130 days from the date of issue of

prospectus on nonreceipt of minimum subscription who will be personally liable.

a) Company b) Directors c) Shareholders d) None of these

11. Transfer of shares in the company is

a) Restricted b) Freely transferable c) Prohibited d) None of these

12. Transfer of shares in the partnership firm is

a) Restricted b) Freely transferable c) Prohibited d) None of these

13.According to which sec. name of the company should end with “Ltd” or “Pvt Ltd”

a) 10 b) 11 c) 12 d) 13

14.The companies which are formed under special charter granted by the king or queen of England

are called

a) Statutory companies b) Registered companies c) Chartered companies d) None of these

15.The companies which are formed under special Act. Those companies are called as

a) Chartered companies b) Statutory companies c) Registered companies d) None of these

16.The companies which are formed under companies Act. 1956. They will be called as

a) Chartered companies b) Statutory companies c) Registered companies d) None of these

17. If the guarantee Co. having no share capital the liability of shareholders will be

a) To the extent of guarantee b) Unpaid value of shares

c) Unlimited d) None of the above

18.Maximum capital of private company is

a) 50 Lakhs b) 1 Crore c) 1.5 Crore d) Unlimited.

19.Transfer of shares in case of private company is

a) Prohibited b) Restricted c) Freely transferable d) None of these

20.Maximum members in case of private company

a) 50 b) 100 c) 75 d) None of these

21.While calculating maximum limit in case of private company which of the following will not be

included

a) Employee + Member b) Member + Employee c) Member d) None of these

22.Managing director will be counted as _____________ while calculating maximum limit in case of

private company.

a) Member b) Employee c) Shareholder d) None of these

23.Where the registrar strikes off the register the name of a company as a defunct one, the court

has the power to order restoration of name with in:

a) 5 years b) 7 years c) 10 years d) 20 years

24.Maximum paid up capital in case of public company.

a) 50 Lakhs b) 100 Lakhs c) 125 Lakhs d) None of these

25.Y Pvt.Co. is subsidiary of X Co. which is a public Company? Mention Y is a

a) Private Co. b) Public Co. c) Government Co. d) None of these

26.Transfer of shares in the case of public company is

a) Prohibited b) Restricted c) Freely transferable d) None of these

27.Public Company and Public Sector Company both the companies are same.

a) True b) False

28.XYZ Co, is having 10% share capital held by another Public Company and 35% held by Central

Government and 55% held by people then that Company is

a) Government Company b) Private Company c) Public Company d) None of these

29.XYZ Co, is having 15% share capital held by X Company and 50% held by Central Government

and 10% held by State Government and 25% held by other people then that company will be

a) Government Company b) Private Company c) Public Company d) None of these

30 ______ is the conclusive evidence in case of company that statutory requirements have complied

with

a) Certificate of Incorporation b) Certificate of commencement of Business

c) Both d) None of the above

31. Private company can start its business immediately after the issue of

a) Certificate of commencement of Business b) Certificate of Incorporation

c) Both d) None of the above

32. Public company Should start business only after getting certificate of

a) Incorporation b) Commencement of business c) None of these

33. Private company can start business only after getting certificate of

a) Incorporation b) Commencement of business c) None of these

34. The doctrine of indoor management is an ______to the doctrine of constructive notice

a) Exception b) Extension c) Alternative d) None of the above

35. The doctrine of _________ does not apply to acts void ab initio.

a) Ultra virus b) Intra virus c) constructive notice d) Indoor management

36. A company can change its name at its own discretion by passing _________

a) Ordinary resolution b) Special resolution c) Boards resolution d) None of the above

37. Any change in the address of the registered office must be communicated to the registrar with

in:

a) 15 days b) 30 days c) 1 Month d) 12 months

38. An act ultra virus the directors can be rectified if it is not ultra vires

a) the articles b) the memorandum c) Company Act d) None of the above

39. The lending of funds ultra vires, the company has no rights

a) under the company’s Act b) contract Act c) under equity d) None of the above

40. If a new company get registered with a name which resembles the name of existing company

then it should apply to whom?

a) NCLT b) SEBI c) ROC d) None of the above

41. Companies are now allotted a _______ in addition to their name

a) PAN b) SIN c) PIN d) CIN

42. In how many days did the company have its registered office after incorporation

a) 10 b) 20 c) 30 d) 40

43.Address of the registered office is situated in

a) MOA b) AOA c) Prospectus d) None of these

44.Which of the following need not have MOA

a) Public company b) Private company

c) Government company d) Statutory Corporation.

45.A company can change its name by passing

a) Ordinary resolution b) Special resolution

c) Either by special resolution or by ordinary resolution d) None of the above

46.Ultra vires means

a) Beyond the power b) with in the power c) Both d) None of the above

47.Ultra vires loans granted by the company are

a) Void b) Voidable c) Valid d) None of the above

48._____ is the charter of a company.

a) Memorandum b) Articles c) Both a) and b) d) None of the above

49.The granting of the certificate of incorporation renders the illegal objects include in the

memorandum:

a) Legal b) Void c) Voidable d) None of the above

50. ______ conceives the idea of the business

a) Promoters b) Directors c) Auditors d) None of the above

51. _______stands in the fiduciary position of the company

a) Directors b) Promoters c) Auditors d) None of the above

52. ______ are the contracts entered into by promoters on behalf of a prospectus company.

a) Provisional contracts b) PreIncorporation contracts c) Preliminary contracts d) Both a) & b)

53. Contracts made after incorporation but before the grant of Certificate of commencement of

Business _____

a) Provisional contracts b) Preincorporation contracts

c) Preliminary contracts d) Both (b) & (c)

54. Preincorporation contract is also known as _________

a) Provisional b) Preliminary c) illegal d) legal

55. What is the time limit for conducting statutory meeting?

a) 1 to 5 months b) 1 to 6 months c) 1 to 9 months d) None of these

56. Notice of statutory meeting should be given with a period not less than

a) 21 clear days b) 14 clear days c) 7 clear days d) None of these

57. Notice of statutory meeting should be attested by at least.

a) 3 directors b) 2 directors c) 3 directors d) None of these

58. First AGM must be held within __________ from the incorporation of the company

a) 15 months b) 18 months c) 12 months d) None of these

59. XYZ co, incorporated on 1 st

Jan 2005. The AGM should be held on 1 st

July 2006. ROC extended

that time to 1 st

Sep.2006.Is the AGM valid.

a) Valid b) Invalid c) Situation does not arise

60. Every AGM must be held with ___________ from the date of the Balance Sheet.

a) 4 months b) 6 months c) 9 months d) None of these

61. First AGM must be held with in ____________ from the date of the balance sheet

a) 6months b) 9months c) 5months d) None of these

62. AGM should be held at

a) Company b) Registered office c) Corporate office d) None of these

63. Central Government can exempt company from holding AGM

a) Yes b) No

64. Failure to convene AGM u/s 166 penalty will be

a) 50,000+250 per every day b) 75,000+250 per every day

c) 1,00,000+250 per every day d) 25,000+250 per every day

65. In case of Public Company the quorum should be

a) 5 members b) 7 members c) 2 members d) None of these

66. In case of private company the quorum should be

a) 2 members b) 3 members c) 4 members d) None of these

67. In the given below who are not required to hold Statutory General Meeting

a) Private company b) Government Company c) Public company d) Both (a) & (b)

68. In case of Statutory General Meeting receipts & payments are prepared up to _______ days

before the date of report

a) 3 b) 5 c) 7 d) 9

69. Who should certify that company allotted the shares and cash received in respect there of ______

a) Auditor b) Director c) Share holder d) Members

70. In the given below who are required to hold A.G.M _______

a) Public company b) Private company c) Government company d) All the three

71. The time period for conduction of AGM is extended by ROC for how many months

a) 1 b) 2 c) 3 d) 4

72. _________ opined that ROC could grant extension only when application for extension is made

before the expiry of period u/s 166 (1)

a) DCA b) NCLT c) Govt d) Both (b) & (c)

73. Which of the following company can held the AGM on public holiday__________

a) Public company b) Private company

c) Govt company d) Association not for profits

74. A company not declare dividend at.

a) Statutory meeting b) Annual general meeting c) Extra ordinary G.M d) None of the above

75. If as a person is present in more than 1 capacity his presence will be counted as _____

a) 1 b) 2 c) 3 d) 4

76. In the absence of a quorum the proceedings of the meeting will be _________

a) Valid b) Void c) Voidable d) None of the above

77. If quorum is not present with in _________ time the meeting is stand dissolved.

a) ½ Hr. b) 1 Hr. c) 1 ½ Hr d) 2 Hr.

78. Which one or more of the following resolution need not be filed with the registrar

a) Special resolution

b) A resolution of Board relating to appointment of a managing director

c) A resolution approving the appointment of a sole selling agent

d) An ordinary resolution

79. In which one of the following cases an ordinary resolution may be passed _________

a) Commencement of a new business b) alteration of articles

c) Compulsory winding up of the company d) none of the above

80. Notice of Adjourn meeting is not required of a meeting is

a) Adjourn for want of quorum b) Adjourn sine die

c) Adjourn for more than 30 days d) None

81. M.M. ltd is incorporated on Jan 1, 2007. It must hold its first AGM before.

a) Dec 312007 b) Dec 312008 c) June 302007 d) June 30 – 2008

ANSWER KER UNIT -5TH

1 A 34 B 67 D2 A 35 D 68 C3 B 36 B 69 A4 D 37 C 70 A5 B 38 C 71 C6 A 39 A 72 A7 B 40 A 73 D8 B 41 D 74 A9 A 42 C 75 B10 B 43 B 76 B11 B 44 D 77 A12 A 45 D 78 C13 D 46 A 79 C14 C 47 A 80 A15 B 48 A 81 C16 C 49 B17 A 50 A18 D 51 B19 B 52 D20 A 53 C21 B 54 B22 A 55 B23 C 56 A24 D 57 B25 B 58 B26 C 59 B27 B 60 C28 C 61 B29 A 62 B30 A 63 B31 B 64 A32 B 65 A33 A 66 A

100 Sample Questions on the Indian Contract Act

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