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Test Code – JK-LAW-01
Date – 09-08-2020

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Tel: (022) 26836666
J.K.SHAH CLASSES JK-LAW-01

Answers
Section A
Q.1
(a)
As per Section 59 of Indian Contract Act, 1872, where the debtor has stated that the
payment made by him should be adjusted against a particular debt, the creditor must
do so if he accepts the payment. And if there is no express, intimation by the debtor,
the law will gather his intention from the circumstances regarding the payment, e.g., if
the amount paid by the debtor is the exact amount of one of the debts, it must be used
to discharge that particular debt. Also, as per Section 60, where the debtor makes
payment without any indication about the appropriation of the payment, the creditor
may adjust the payment according to his discretion. (2 Marks)
In the given question, Navin paid ₹32,000 on 02/12/2019 with a request to appropriate
the same against amount borrowed on 05/10/2019. Applying the above provisions,
Navin, as a debtor, has a right to decide the debt towards which payment is to be
appropriated.
If Navin fails to specify, the amount will be appropriated as per Pravin‘s instructions
or law will gather its intention from the circumstances. (2 Marks)

(b)
Small Company: According to Section 2(85) of the Companies Act, 2013, Small
Company means a company, other than a public company,—
(1) Paid-up share capital of which does not exceed fifty lakh rupees or such higher
amount as may be prescribed which shall not be more than ten crore rupees; and
(2) Turnover of which as per its last profit and loss account does not exceed two
crore rupees or such higher amount as may be prescribed which shall not be more
than one hundred crore rupees.
Nothing in this clause shall apply to -
(a) a holding company or a subsidiary company;
(b) a company registered under section 8; or
(c) a company or body corporate governed by any special Act. (2 Marks)
(i) In the present case, Maharana Pratap Private Ltd., a company registered under the
Companies Act, 2013 with a paid up share capital of ₹40 lakh and having
turnover of ₹2.8 crore. Since only one criteria of share capital of ₹50 Lakhs is
met, but the second criteria of turnover of ₹2 crores is not met and the provisions
require both the criteria to be met in order to avail the status of a small company,
Maharana Pratap Ltd cannot avail the status of small company.

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(ii) If the turnover of the company is ₹1 crore, then both the criteria will be fulfilled
and Maharana Pratap Ltd. can avail the status of small company. (1 + 1 Marks)
(c)
Price and Modes of fixing the price
The price means the money consideration for the sale of goods. Price may be fixed in
any of the following modes provided in Section 9:
1. The fixation of price by the contract of sale: The price may be expressly fixed the
contract of sale. The parties may fix any price they like.
2. The fixation of price in a manner provided in the contract of sale: The contract of
sale may provide for some manner in which price is to, be fixed. In such cases,
the price may be fixed in a manner provided in the contract.
3. The fixation of price by course of dealings: Sometimes, the customs or usage of
trade provides certain principles for the determination of the price. In such cases,
the price may be determined from the course of dealings between the parties.
4. The fixation of a reasonable price: Sometimes, none of the above principles is
applicable. In such cases, the buyer shall pay to the seller a reasonable price. The
term 'reasonable' price is a question of fact which depends on the circumstances
of each particular case.
5. The fixation of price by third party [Section 10]: The parties may agree to sell
and buy goods on the terms that the price shall be fixed by the valuation of a third
party. However, if such third party fails to make the valuation, the contract
becomes void. (4 Marks)

Q.2
(a)
(a) Meaning of Quasi Contracts: When the law implies a promise imposing
obligations on one party and conferring right in favour of the other even when
there is no offer, no acceptance, no genuine consent, lawful consideration, etc.
and in fact neither agreement nor promise. Such cases are not contracts in the
strict sense, but the Court recognizes them as relations resembling those of
contracts and enforces them as if they were contracts. Such contracts are known
as Quasi –contracts. (1 Mark)
Salient features of Quasi Contracts:
a) In the first place, such a right is always a right to money and generally,
though not always, to a fixed sum of money.
b) Secondly, it does not arise from any agreement of the parties concerned, but
is imposed by the law; and

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c) Thirdly, it is a right which is available not against the entire world, but
against a particular person or persons only, so that in this respect it
resembles a contractual right. (1 Mark)
Circumstances of Quasi Contracts:
Following are the circumstances in which the quasi contractual obligations arise.
These are contained in Sections 68 to 72 of the Indian Contract Act:
1. Supply of necessaries to persons who are incompetent to contract (Section
68): When a person supplies the necessaries to a person who is not
competent to contract (i.e., minor, persons of unsound mind such as lunatics,
etc.), or to another person to whom the incompetent person is bound to
support, the person supplying the necessaries is entitled to recover the cost
of necessaries from the property of such incompetent person even if there is
no valid contract between them.
2. Payment by an interested person (Section 69): When the person who has
made the payment can recover such money from the person who is legally
bound to pay.
3. Non-gratuitous acts (Section 70): The 'non-gratuitous- acts' means the acts
which are not done free. A person, who does some non-gratuitous acts for
another, is entitled to recover compensation for such acts if the other person
enjoys the benefits of such acts.
4. Finder of goods (Section 71): When a person finds certain goods, belonging
to some other person. In such cases, the goods not become the property of
the finder. it becomes the duty of the finder to keep the goods with care and
take some steps to trace the true owner and return the goods to him.
5. Payment of money or deliver of goods by mistake or under coercion (Section
72): When a certain amount of money is paid or something is delivered to a
person by mistake or under coercion. In such cases, the person receiving the
money or goods must repay or return the same to the person who has paid or
delivered by a mistake or under coercion. (1 Mark for each point)

(b)
1. Proper Books of account: The LLP shall maintain such proper books of account
as may be prescribed relating to its affairs for each year of its existence on cash
basis or accrual basis and according to double entry system of accounting and
shall maintain the same at its registered office for such period as may be
prescribed.
2. Statement of Account and Solvency: Every LLP shall, within a period of 6
months from the end of each financial year, prepare a Statement of Account and

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Solvency for the said financial year as at the last day of the said financial year in
such form as may be prescribed, and such statement shall be signed by the
designated partners of the LLP.
3. Every LLP shall file within the prescribed time, the Statement of Account and
Solvency prepared with the Registrar every year in such form and manner and
accompanied by such fees as may be prescribed.
4. The accounts of LLP shall be audited in accordance with such rules as may be
prescribed. However, the Central Government may, by notification in the Official
Gazette, exempt any class or classes of LLP from the requirements of this section.
5. Any LLP which fails to comply with the provisions of this section shall be
punishable v With fine which shall not be less than ₹5,000.But which may extend
to ₹5 Lakhs Every designated partner of such LLP shall be punishable with fine
which shall not be less than ₹10,000 but which may extend to ₹1 Lakh.
(1 Mark for each point)
Q.3
(a)
Partnership and Association:
Partnership Club / Association
1. Business oriented objects 1. Not aimed at making profits entirely.
2. Maximum partners can be 50. 2. No such limit is applicable here.
3. Does not enjoy long lease of life 3. Enjoys a long lease of life
4.There is mutual agency amongst the 4. There is no mutual agency amongst
partners the members
(0.5 Mark for each point)
(b)
Partnership Deed
 Partnership is the result of an agreement. No particular formalities are required
for an agreement of partnership. The document in writing containing the various
terms and conditions as to the relationship of the partners to each other is called
the ‗partnership deed‘. It should be stamped according to the provisions of the
Stamp Act, 1899. Where the partnership comprises of immovable property, the
instrument of partnership must be in writing, stamped and registered under the
Registration Act.
A partnership firm may add or delete any provision according to the needs of the
firm. (2 Marks)
 Partnership deed may contain the following information:-
1. Name of the partnership form.
2. Names of all the partners.

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3. Nature and place of the business of the firm.
4. Date of commencement of partnership.
5. Duration of the partnership firm.
6. Capital contribution of each partner.
7. Profit Sharing ratio of the partners.
8. Admission and Retirement of a partner.
9. Rates of interest on Capital, Drawings and loans.
10. Provisions for settlement of accounts in the case of dissolution of the firm.
11. Provisions for Salaries or commissions, payable to the partners, if any.
12. Provisions for expulsion of a partner in case of gross breach of duty or fraud.
(2 Marks)
(c)
As per provisions of Indian Contract Act, an offer is definite and capable of converting
an intention into a contract. Whereas an invitation to an offer is only a circulation of an
offer, it is an attempt to induce offers and precedes a definite offer. An invitation to
offer is an act before making an offer. Acceptance of an invitation to an offer does not
result in the contract and only an offer emerges in the process of negotiation. In order
to ascertain whether a particular statement amounts to an ‗offer‘ or an ‗invitation to
offer‘, the test would be intention with which such statement is made. Does the person
who made the statement intend to be bound by it as soon as it is accepted by the other
or he intends to do some further act, before he becomes bound by it. In the former
case, it amounts to an offer and in the latter case; it is an invitation to offer.
(3 Marks)
In the given question, an auctioneer in Delhi advertised in a newspaper that a sale of
office furniture would be held on December 25, 2019. A broker came from Assam to
attend the auction, but all the furniture was withdrawn. The broker from Assam sued
the auctioneer for loss of his time and expenses. When a person advertises that he has
to goods, there is no offer to be bound by any contract. Such advertisements are offers
to negotiate-offers to receive offers. Hence, the advertisement of auction sales is just
an invitation to offer and not offer. So, no contract is concluded. Auctioneer has full
right to withdraw the furniture. (2 Marks)
Therefore, the broker cannot claim damages. (1 Mark)

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Q.4
(a)
(i) Right of Lien
 The right of lien is the right to retain possession of the goods.
 This right can be exercised only when the possession of goods is with the
seller.
 The unpaid seller of goods can retain his possession of goods until payment
of the price in following cases:
a) Where the goods are not sold on credit.
b) Where the goods have been sold on credit, but the term of credit has
expired
c) Where the buyer becomes insolvent.
 The unpaid seller can retain the goods only for the payment of the price of
the goods
 Termination of Lien:
a) By delivery of goods to the carrier/ buyer
b) By Estoppel i.e., where the seller by his conduct makes third parties
believe that he has waived his right of lien.
c) By waiver of the lien
d) By payment of price by the buyer (2 Marks)

(ii) Right of stoppage in transit

 The right of stoppage in transit means the right of stopping the goods while
they are in transit, to regain the possession and to retain them till the full
price is paid.
 When the unpaid seller has parted with the goods to a carrier and the buyer
has become insolvent, he can exercise this right of asking the carrier to
return the goods back, or not to deliver the goods to the buyer.
 This right is the extension of the right of lien because it entitles the seller to
regain possession even when the seller has parted with the possession of the
goods.
 Duration of transit: The goods are deemed to be in course of transit from
the time when they are delivered to a carrier or other bailee for the purpose
of transmission to the buyer, until the buyer or his agent in that behalf takes
delivery of them from such carrier or other bailee. (2 Marks)

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(iii) Right of Resale
 The unpaid seller has the direct right to resell the goods in the following
circumstances:
1. Where the goods are of perishable nature
2. Where the unpaid seller has expressly reserved his right of resale.
 In any other case, the unpaid seller has theright to resell the goods by
following the procedure:
1. Unpaid seller should give a notice to the buyer of his intention to resell
the goods and additional time for payment
2. If the buyer does not pay the price within a reasonable time, the seller
may resell the goods (2 Marks)

(b)
As per Section 31 of Indian Partnership Act, 1932, an incoming partner is not liable for
the acts of the firm done before his admission into the firm. The liability of an
incoming partner starts from the date of his admission into the firm. Thus, he is liable
for all the acts of the firm done after he became a partner in the firm. If the incoming
partner agrees to bear the past liabilities, then for past liabilities he shall not be liable
to third parties as he is a stranger to contract but he shall be liable to other partners.
(3 Marks)
st
In the given question, Rahul was admitted to the partnership firm on 1 April, 2020 but
he agreed with other partners to bear the past liabilities from 1st January, 2020. On
10th February, 2020, the firm entered into a contract with Divya to buy raw materials
for manufacturing goods of the business. Since, Rahul agreed to bear the past
liabilities, after considering the above provisions, he is liable to other partners for the
above mentioned liability. (2 Marks)
Hence, if the firm failed to pay Divya, Rahul is not liable to pay Divya as he is a
stranger to the contract but he is liable to other partners. (1 Mark)

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Q.5
(a)
As per Section 23 of Sale of Goods Act, 1930, appropriation of goods involves
selection of goods with the intention of using them in performance of the contract and
with the mutual consent of the seller and the buyer. The essentials for appropriation
are:
a) There is a contract for the sale of unascertained or future goods.
b) The goods should conform to the description and quality stated in the contract.
c) The goods must be in a deliverable state.
d) The goods must be unconditionally appropriated to the contract either by delivery
to the buyer or his agent or the carrier.
e) The appropriation must be made by:
(i) The seller with the assent of the buyer; or
(ii) The buyer with the assent of the seller.
f) The assent may be express or implied.
g) The assent may be given either before or after appropriation.
(3 Marks)
The ownership is transferred to the buyer after appropriation of goods.
In the given question, Ganesh sent a delivery order for 125 bags from a wharf, and
wrote saying that the remaining 15 bags were ready for delivery at his place of
business. Priyansh did not collect 15 bags until March 25. Applying the above
prvisions, all the essentials of appropriation seem to be satisfied. Hence, ownership is
transferred. (1 Marks)
Therefore,
(i) Ganesh has appropriated the contract and Priyansh has assented to such
appropriation as Ganesh had appropriated 15 bags and Priyansh‘s assent to
appropriation can be inferred from his conduct in not objecting it as assent can be
express or implied.
(ii) Since property is already transferred to Priyansh he cannot recover the price paid
(2 Marks)

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(b)
Memorandum of Association
Meaning: The Memorandum of Association of company is its charter; it defines its
constitution and the scope of the powers of the company with which it has been
established under the Act. It contains the object for which the company is formed and
therefore identifies the possible scope of its operations beyond which its actions cannot
go. It enables shareholders, creditors and all those who deal with company to know
what its powers are and what activities it can engage in. (2 Marks)
Content of the Memorandum:
1. Name clause: The first clause in the memorandum must state the name by which
a company is known. The name of the company with the last word "Limited" in
the case of a public limited company, or the last words "Private Limited" in the
case of a private limited company.
2. Situation or registered office clause: The name of the State in which the
registered office of the company is to be situated must be given in the
memorandum. But the exact address of the registered office is not required to be
stated therein.
3. Object clause: The objects for which the company is proposed to be incorporated
and any matter considered necessary in furtherance thereof;
4. Liability Clause: The liability of members of the company, whether limited or
unlimited, and also state,—
 in the case of a company limited by shares, that the liability of its members
is limited to the amount unpaid, if any, on the shares held by them; and
 in the case of a company limited by guarantee, the amount up to which each
member undertakes to contribute—
 to the assets of the company in the event of its being wound-up while
he is a member or within one year after he ceases to be a member, for
payment of the debts and liabilities of the company or of such debts and
liabilities as may have been contracted before he ceases to be a
member, as the case maybe; and
 to the costs, charges and expenses of winding-up and for adjustment of
the rights of the contributories among themselves;
5. Capital Clause (only in the case of a company having a share capital):The
amount of authorized capital divided into share of fixed amounts and the number
of shares with the subscribers to the memorandum have agreed to take, indicated
opposite their names, which shall not be less than one share. A company not
having share capital need not have this clause.

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6. Association/Subscription Clause: In this clause, the persons (includes a body
corporate) subscribing to the memorandum declare their desire to be formed into
a company and agree to take the shares indicated opposite their respective names.
7. Succession Clause (only in the case of OPC):This clause shall state the name of
the person who, in the event of the death of the subscriber, shall become the
member of the company. (4 Marks)

Q.6
(a)
Doctrine of Privity of Contracts:
A contract is a private relationship between parties who make it, hence the rights and
obligations under such a contract are strictly confined to them. This is known as the
doctrine of ―privity of contract‖. It is a general rule of law that a person who is not a
party to the contract cannot sue.
The rule is “Stranger to contract cannot sue. But a stranger to a consideration can
sue”. (1 Mark)
However, following are the exceptions to the Rule‖ A stranger to a contract cannot
sue‖:
(1) Beneficiaries in the case of trust:
An agreement to create a trust can be enforced by the beneficiary, though he was
not a party to the contract between the settler and the trustees.
(2) Written family settlements:
In the case of family settlement, if the terms of settlement are reduced in writing,
members of the family who were not a party to the settlement can also enforce
their claim.
(3) Partition of Hindu Undivided Family:
In the case of certain marriage contracts a female member can enforce a provision
for marriage expense based on a petition made by the Hindu undivided family.
(4) Assignment of contract:
Where there is an assignment of a contract, the assignee can enforce the contract
for various benefits that would accrue to him on account of the assignment.
(5) Acknowledgement of Debts:
In case of part performance of a contractual obligations or where there is
acknowledgment of liability on account of estoppel, a third party can sue for
benefits.

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(6) Covenants with land:
Where a piece of land which is sold to buyer with certain covenants relating to
land and the buyer is kept on notice of the covenants with certain duties, there the
successors to the seller can enforce these covenants.
(7) Contracts made by the agent:
The principal can enforce the contracts entered by his agent where the agent has
acted within the scope of his authority and in the name of the principal.
(4 Marks)
(b)
Yes, a firm may be dissolved without the intervention of the court i.e., without going
to the Court of Law.
The dissolution without the intervention of the court may take place in any of the
following ways:
1. Compulsory dissolution (Section 41):
In the following cases, the firm is compulsorily dissolved even if the partners
agree that the firm shall not be dissolved in such cases.
(a) Insolvency/death of all the partners:
Where all the partners of the firm become insolvent/death, the firm
is dissolved. The firm is also dissolved when all the partners except
one have become insolvent/died.
(b) Business of the firm becoming unlawful:
This includes the cases where the business of the firm is rendered unlawful
by the outbreak of war, or where the object for which the firm was formed
becomes unlawful or illegal, or where the business remains lawful but it is
forbidden to be carried on in partnership. (2 Marks)
2. Optional dissolution:
(a) Dissolution by agreement between the partners (Section 40):A
firm may also be dissolved in accordance with a contract between the
partners in the same way as a firm is formed with the contract between the
partners. There may be a separate contract for the dissolution of the firm, or
it may also be contained in the partnership deed itself.
(b) Dissolution by notice (Section 43): A firm can also be dissolved by
any partner by giving a notice of dissolution to the other partners where the
partnership firm is ‗at will‘.
(c) Dissolution on the happening of certain contingencies (Section
42): On the happening of anyone of the following contingencies (i.e.,
events), the firm is automatically dissolved.

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(i) Expiry of fixed term:
Where the firm is constituted for a fixed term, the firm is dissolved on
the expiry of that term. This is, however, subject to a contract to the
contrary i.e., if the contract provides that the firm shall not be
dissolved, then it will not be dissolved.
(ii) Completion of the adventure or undertaking:
Where the firm is constituted to carry out one or more adventure or
undertaking, the firm is dissolved on the completion of such adventure
or undertaking. This is also subject to a contract to the contrary.
(iii) Death/Insolvency of a partner:
If one of the partners of a firm dies or becomes insolvent during the
continuance of the firm. In such cases, the firm is dissolved on the
death/insolvency of the partner. This is subject to a contract to the
contrary. (2 Marks)
(c)
As per provisions of The Companies Act, 2013, Corporate Veil refers to a legal
concept whereby the company is identified separately from the members of the
company. Courts can lift the corporate veil if companies form other companies as their
subsidiaries to act as their agent.
As per the case of Merchandise Transport Limited vs. British Transport
Commission, the Transport Company wanted to obtain licences for its vehicles, but
could not do so if applied in its own name. It, therefore, formed a subsidiary company,
and the application for licence was made in the name of the subsidiary. The vehicles
were to be transferred to the subsidiary company. Held, the parent and the subsidiary
were one commercial unit and the application for licences was rejected.
(2 Marks)
The given question is similar to the facts of the above case law. Uver Transport
Company held 90% of the equity share capital of Uter Transport Company. Hence,
Uter Transport Company is subsidiary of Uver Transport Company who applied for
license to indirectly conduct business activities of its holding Company. Here, the
courts can lift the corporate veil and treat them as one commercial unit.
(1 Mark)

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SECTION – B: BUSINESS CORRESPONDENCE AND REPORTING
Q.7
(a)
(1) Because he felt that such a warning would weaken the shock effect of the bomb.
(1 Mark)
(2) The decision made in Postsdam Conference. (1 Mark)

(3) The reason appears to be to destroy few but save more lives in the long run.
(1 Mark)
(4) Summary:
The dilemma of dropping the bomb in desert was either inability to convince
sceptical Japanese or forewarning them to send war prisoners there.
The fact was scarcity of plutonium. Truman and Churchill had to take the difficult
decision to save more lives than ruin, avoid long lasting war, cost and casualities.
As ordered by Truman, Hiroshima and Nagasaki were chosen over Nigata and
Kokara; only after he left Postsdam.
(2 Marks)
(b)
(1) Transition of Social empowerment and Employment
1. Trans.of soc.empt.
1.1 found in
1.1. Modern age
1.2. ancnt.,mdvl,pre mod.age
1.2.a. ingrnd.in cult.
1.2.b. ensd.law,eq.and harmony
1.2.c. also contd.by British
2. Aft. Ind.chngs.
2.1. socio-eco.cult.chngd.due to expltn.of British
2.1.1. became uneco.,poor
3. Other reasons
3.1. Mismgt.
3.2. famine
3.3. ineq.
3.4. soc.cult.trdns.

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4. Mixed Eco.
4.1. state initiative
4.2. Plng.Com.for f‘ship prog.revwd.
4.2.a. perfmnc.
4.2.b. eff.on eco.
4.2.c. empd.mgnlsd.farmers
5. Imperative for
5.1. eq,grwth.
5.2. unlock potntl.of deprvd.
6. Rural Schemes lnkd.to
6.1. soc.infra.
6.2. prod.emplyt.
7. Women Power
7.1. eq.in vedic period
7.2. now subjgtd.,harassed
8. MOCWD
8.1. Leadership to promote
8.1.a. Wmn.empt.
8.1.b. dignity
8.1.c. eq.
8.1.d. free frm.vio.& discrmn.
9. Children
9.1. ICDS
9.1.1. world‘s largest and unq.prog.
10. Result
10.1. shft.frm.agr.eco.
10.2. edn.opp.
10.3. DD for emplyt.
10.3.a. basic emplyt in lean season
10.3.b. asprns.of youth.

Key:
Trans. – Transition
Soc.empt. - Social Employment
ancnt.,mdvl,pre mod.age – Ancient. Medieval, Pre-modern age
ingrnd – Ingrained

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cult. – culture
ensd. – ensured
eq. – equality
contd – continued
aft. – after
ind. -- independence
expltn. -- exploitation
uneco. – uneconomic
mismgt. --- mismanagement
ineq. --- inequality
socio.cult.trdns. --- socio cultural traditions
plng.comn.f‘ship prog.revwd. -Planning Commission flagship programmes
pfmnc. ---- performance
eff. --- effect
eco. --- economic
empwd. --- emoowered
mgnlsd. --- marginalised
eq. - equitable
potntl. --- potential
depd. ---- deprived
schms. --- schemes
lkd. --- linked
soc.infra. -- social infrastructure
prod.emplyt. ---- productive employment
subjgtd. --- subjugated
MOCWD ---- Ministry of Child and Women Development
Prom. --- promote
Wmn.empt. ---- women empowerment
Vio.and discrmn. --- violence and discrimination
Unq.prog. ---- unique programme
Shft.frm.agr.eco. --- shift from agricultural economy
Edn.opp. --- educational opportunities
DD ---- Demand
Asprns. ---- aspirations
Yth. ---- youth
--- increased
(3 Marks)

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(2) Summary:
Social Welfare – Indian Transition
Social welfare schemes have been prevailing right through the Mouryan Age to
British to modern age ;as a part of our culture – to ensure law, equity and
harmony.
After independence, socio-economic fabric changed due to British exploitation.
India became poor and diseased following famines, inequality and traditions.
State took initiative through Planning Commission to review performance of
various programmes, designed to empower women and children. These
programmes were necessary for equality and to unlock potential of our population
and provide employment.
While women were empowered and freed from violence and discrimination by
MOCWD on one hand; the children (0-6 yrs.) were provided care and
development through the largest and unique ICDS schemes.
This resulted into shift from agro economy to opportunity and employment
generating economy.
(2 Marks)
Q.8
(a)
Communication Network refers to the method and pattern to transmit information to
other employees, in an organisation. It helps the flow of communication created by
managers, as per the task at hand.
The structure of this network depends on the size and communication channels of the
organisation. It also depends on the number of persons involved in the process.
(2 Marks)
(b)
(1) (iv) Unrelenting (1 Mark)
(2) (iii) giant (1 Mark)
(3) She asked whom he had asked. (1 Mark)

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(c)
Precis:
Rationale behind FDI
Despite availability of low - risk alternatives like exporting and licensing, a firm
decides to invest in foreign markets because heavy and voluminous products attract
higher freight and low competitiveness. Further, ease of doing business lies more with
indigenous firms adding to the cost; termed as liability of foreignness.
For example, Kellogg being unaware of Indian market and habits, blundered and took
long to understand it before positioning it as a complimentary rather than a substitute
product.
Moreover, Disneyland failed in France owing to similar and analogical reasons.
Thus, a trade – off between scale economy by producing at a single location and FDI
benefits like proximity,control and better access to the market; needs to be arrived at.
(5 Marks)

Q.9
(a)
Coherent is one of the most important characteristics of communication. It is the
logical bridge between words, sentences and paragraphs.
Communication can be coherent and understandable by the reader only if the
information is organised sequentially and presented logically.
In a nutshell, coherence means that the content should be relevant, interconnected and
presented in a flow. (2 Marks)
OR

(a)
There are many barriers in communication. One of them is Organizational structure. It
occurs when systems, structures and processes within the organization are not clear
and if there are gaps in between. It precipitates from unclear chain of command.
An employee is confused as to whom to contact for a particular issue. Thus,
inappropriate information transmission systems, lack of supervision, lack of clarity of
individual roles and responsibility demarcations; lead to confusion and inefficiency
and thus, act as barriers in communication.

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(b)
(1) (iii) gluttonous (1 Mark)
(2) (i) Parsimonious (1 Mark)
(3) Abodh asked Subodh if(whether) he had visited Dehradun when he had been in
Delhi, the previous year. (1 Mark)

(c)
10 farmers commit suicide in Maharashtra
Times of India
July,23 Mumbai : ‗Jai Jawan Jai Kisaan‘ has been the dictum of our nation from time
immemorial. While the Jawans have been laying down their lives for the nation; it now
seems to be the turn of Kisaans , to do so.
10 farmers have been reported to have committed suicide in the Latur district of
Maharashtra, reportedly due to their inability to pay debts and monsoon failure.
It may be recalled that over 12000 suicides are reported in the agricultural sector every
year, since 2013.Farmers‘ suicides account for nearly 10% of all suicides in India.
―The menace of farmers‘ suicides exists and runs counter to the aspirations of reaping
benefits of our Demographic Dividend. This will go on until the high debt burdens
coupled with hostile government policies are dealt with. The farmer who is responsible
to fill the stomach of millions, has to die because he cannot fill his own stomach. How
paradoxical!‖ Said the Secretary of Shetkari Kaamgaar Sangathan ; Shri Baburao
Dhakne.
The government, on its part, has assured the farmers of waiver of loans up to a
staggering 65000 crores and increase the Minimum Support Price of key food grains to
meet the surging costs and end the distress caused due to loans.
Thus, the government has yet again relied on appeasement policies instead of
restructuring and re-investment measures.
(5 Marks)
Q.10
(a)
The broad categories of communication are as follows:
1. Based on Channels:
A/Verbal (Written and Oral) B/ Non-Verbal (Physical Non Verbal, Appearance,
Aesthetic and Paralanguage) C/ Visual
2. Based on Purpose and Style:
A/Formal B/ Informal
(2 Marks)

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(b)
(1) The customer is practically being accused of lying by the agent. (1 Mark)
(2) Nature will exalt him who humbles himself. (1 Mark)
(3) Simple. (1 Mark)

(c)
ABC Ltd.
Park Lane
Mumbai 400 016.
July 20,2000
Senior Manager
Operations Department
ITC Ltd.
Chowringee
Kolkata
Dear Mr.Ranganathan,
Subject: Reply to complaint against Order No. FE/2019-20
This has reference to your Order No. FE/19-20, dated May 20,2020 pertaining to the
supply of 6 sets of fire -fighting equipment, A-4 type.
We accept the inordinate delay on our part in the supply of the same and apologise for
the same, profusely.
We wish to request you to understand the authentic reasons for the same.
We are using German spindles as a main spare part to ensure double safety. Our
consignment from Germany got stranded due to a huge fire; our German suppliers
suffered in their factory, three weeks ago.
However, we have already sourced out the same spare part from Japan and the same is
likely to reach us in a week‘s time.
We finally promise you to supply the equipment, duly assembled; by August 3,2020.
You have been our valued customer for years and thank you for bearing with us during
this unforeseen situation.
As a small token of honour and as a mark of apology, we will waive off all of our
installation charges in the spirit of continued business relationship.
We look forward to your support.
Thanking you in anticipation.
Sanjeev Goel
General Manager- Sales
ABC Ltd. (5 Marks)

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Q.11
(a)
The proportion accounted for is as follows:
Verbal - 55%; Non Verbal - 7%; Paralanguage - 38%
Grapevine - It is common that employees of any organisation interact with each other
outside the formal domain. Such communication is called ‗grapevine‘. This refers to
gossip in the office and discussion among employees of different departments at
different levels.
The grapevine satisfies the social needs of the employees and helps in building
relationships. It also addresses grievances of employees.
(2 Marks)

(b)
(1) (iv) Argue in support of both the sides (1 Marks)
(2) (i) To escape (1 Marks)
(3) Could Kalidasa have preferred an idle weekend? (1 Marks)
(4) (iii) Omnipotent (1 Marks)

(c)
1. AGENDA
Time Topic Attendees Speaker Duration
10.00 AM Introduction Mr. P,Q,R – S&M Mr.P 15 Minutes
Mr.A,B,C -Product Devt.
10.15 AM – Review -- do ---- Mr.B 45 Minutes
11.00 AM Policies
11.00 AM Tea Break
11.30 AM - 1) Profitable -- do ---- Mr.Q 60 Minutes
12.30 AM v/s
Non-Profitable
Products
2) Non- Mr.A ----
Profitable
Products

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J.K.SHAH CLASSES JK-LAW-01

2. MINUTES OF THE MEETING:

DATE: October 19, 2020
• The meeting started at 10.00 AM.
• Mr. P gave an introduction.
• Mr. B reviewed policies of the last year and compared them with suggested
changes.
• The participants appreciated and approved the changes suggested by Mr. B.
• Mr. Q had segregated profitable and non – profitable products, beforehand
and that helped the focus on only the selected and profitable products.
• A congenial atmosphere prevailed throughout the meeting and the
Advertising agency representative, Mr. C was entrusted to devise an
effective campaign and was instructed to submit Action Taken Report by
October 29, 2020.
(4 Marks)

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