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CA Inter Law Test Marathon – Test 6
CORPORATE AND OTHER LAWS
CA Intermediate Test Series – July 2020
Chapter 10 – Contract Act
Chapter 12 – General Clauses Act
1. The question paper comprises two parts, Part I and Part II.
2. Part I comprises Multiple Choice Questions (MCQs).
3. There is no requirement to give any reasoning for MCQs.
4. Part II comprises questions which require descriptive type answers.
5. Duration of the examination is 1 hour.
______________________________________________________________________________________
PART – I
(7 MCQs x 1 marks each = 7 marks)
Q1: A, B and C, as sureties for D for a sum of INR 1,00,000/- lent to E, and there is a contract among A, B and C that A is to
be responsible up to an extent of INR 25,000, B up to an extent of INR 25,000 and C up to an extent of INR 50,000. E
makes a default in payment of INR 60,000. State the liability of A, B and C
(a) A and B are liable INR 15,000 each and C for INR 30,000
(b) A, B and C are liable for INR 20,000 each
(c) A and B are liable for INR 25,000 each and C for INR 10,000
(d) A is liable for INR 20,000; B is for INR 25,000 and C for INR 15,000
Q2: A good friend of Mr. A, Mr. D is a property dealer in Delhi and works for many renowned registered real estate
developers. As Mr. D is doing very well in his work, Mr. A also wanted to work as a property dealer or property agent.
Mr. X, a real estate developer of Delhi, appointed Mr. D as his agent for selling flats in his upcoming project, and asked
him to name some other person to work for him, for another project. At this time, he introduced Mr. A to Mr. X, saying
that he is also in the same field for last 10 years, although Mr. A did not had any experience in this field. Going by his
words, Mr. X instructed to appoint Mr. A also for his other ventures. From the following, Mr. A will be treated as
(a) Agent of Mr. X
(b) Sub-agent of Mr. D
(c) Substituted agent of Mr. X
(d) Sub- agent of Mr. X
Q3: Aman contracts to indemnify Megha against the consequences of any proceedings which Chandar may take against
Megha in respect of a sum of 15000/- advanced by Chandar to Megha. Now, Megha who is called upon to pay the sum
of money to Chandar but she fails to do so. Now, as per the provisions of the Indian Contract Act, 1872, advise the future
course of action to be taken by Chandar.
(a) Chandar cannot recover the amount only from Megha
(b) Chandar can recover the full amount from Aman
(c) Chandar cannot recover the amount from Aman
(d) Chandar can recover at least 10% of the total amount from Megha
Q4: A had to travel to a different town for 5 days. He left his cow in the custody of B so that she can be taken care of. After
two days the cow delivers a calf. Now, B has to return to A –
(a) Only the cow
(b) Only the calf
(c) Both the cow and the calf
(d) Either the cow or the calf
Q5: Substituted agent is the agent of
(a) Agent
(b) Principal
(c) Sub-agent
(d) Third party
CA Harsh Gupta t.me/CA_Law_HarshGupta
CA Inter Law Test Marathon – Test 6
Q6: Where an act of parliament does not expressly specify any particular day as to the day of coming into operation of such
Act, then it shall come into operation on the day on which
(a) It receives the assent of the President
(b) It receives the assent of the Governor General
(c) It is notified in the official gazette
(d) None of these
Q7: Which of the following given Statement/s is/are correct?
(1) In all Central Acts and Regulations, any words which denote the masculine gender shall also be taken to include
females, and vice versa.
(2) In all Central Acts and Regulations, words in the singular shall include the plural, but not vice versa.
(a) Only statement (1) is correct
(b) Only statement (2) is correct
(c) Both the statements are correct
(d) None of the statement is correct
CA Harsh Gupta t.me/CA_Law_HarshGupta
CA Inter Law Test Marathon – Test 6
PART – II
(18 marks)
Question paper comprises 4 questions. Answer Question No. 1 which is compulsory and any 2 out of the remaining 3
questions.
Working notes should form part of the answer.
1.
(a) Manoj guarantees for Ranjan, a retail textile merchant, for an amount of 1,00,000, for which Sharma, the
supplier may from time to time supply goods on credit basis to Ranjan during the next 3 months.
After 1 month, Manoj revokes the guarantee, when Sharma had supplied goods on credit for 40,000. Referring
to the provisions other Indian Contract Act, 1872, decide whether Manoj is discharged from all the liabilities to
Sharma for any subsequent credit supply What would be your answer in case Ranjan makes default in paying back
Sharma for the goods already supplied on credit i.e. 40,000?
(3 marks)
(b) X owned a land with 50 tamarind trees. He sold his land and the timber (obtained after cutting the 50 trees) to Y.
X wants to know whether the sale of timber tantamount to sale of immovable property. Advise him with reference
to provisions of “General Clauses Act, 1897”.
(3 marks)
2.
(a) Define contract of indemnity and contract of guarantee and state the conditions when guarantee is considered
invalid?
(3 marks)
(b) What do you understand by the term ‘Good Faith’. Explain it as per the provisions of the General Clauses Act,
1897. Mr. X purchased a watch from Mr. Y carelessly without proper enquiry. Whether the purchase made could
said to be made in good faith.
(3 marks)
3.
(a) Amar bailed 50 kg of high quality sugar to Srijith, who owned a kirana shop, promising to give 200 at the time of
taking back the bailed goods. Srijith's employee, unaware of this, mixed the 50 kg of sugar belonging to Amar with
the sugar in the shop and packaged it for sale when Srijith was away. This came to light only when Amar came
asking for the sugar he had bailed with Srijith, as the price of the specific quality of sugar had trebled. What is the
remedy available to Amar?
(3 marks)
(b) ‘Repeal' of provision is different from 'deletion of provision. Explain.
(3 marks)
.
4.
(a) Rahul, a transporter was entrusted with the duty of transporting tomatoes from a rural farm to a city by Aswin.
Due to heavy rains, Rahul was stranded for more than two days. Rahul sold the tomatoes below the market rate in
the nearby market where he was stranded fearing that the tomatoes may perish. Can Aswin recover the loss from
Rahul on the ground that Rahul had acted beyond his authority?
(3 marks)
(b) A notice was served on Mr. P for appearing in the court. However, the notice could not be served on account of
the fact that the house of the Mr. P was found locked. Thus, Mr. P. did not appear in the court at the said date.
Examine the situation as per the provisions of the General Clauses Act, 1897 and determine whether Mr. P. will
be liable in the given situation.
(3 marks)
CA Harsh Gupta t.me/CA_Law_HarshGupta
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