36_7990final_cl_sp_sn_nov_2004_gr1.pdf - PAPER \u2013 4 CORPORATE LAWS AND SECRETARIAL PRACTICE Question Nos 1 2 and 3 are compulsory Answer any four

36_7990final_cl_sp_sn_nov_2004_gr1.pdf - PAPER – 4...

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PAPER – 4 : CORPORATE LAWS AND SECRETARIAL PRACTICE Question Nos. 1, 2 and 3 are compulsory. Answer any four questions from the rest of the question. Question 1 Answer any two of the following: (a) ABC Ltd. has 12 directors on its board and has the following clause in its Articles of Association: “The questions arising at any meeting of the Board of Directors or any Committee thereof shall be decided by a majority of votes, except in cases where the Companies Act, 1956 expressly provides otherwise.” In a meeting of the Board of Directors of ABC Ltd. 8 directors were present. After competition of discussion on a matter voting was done. 3 directors voted in favour of the motion, 2 directors voted against the motion while 3 directors abstained from voting. You are required to state with reference to the provisions of the Companies Act, 1956 whether the motion was carried or not. (5 marks) (b) Mr. Patel has transferred his shares of a listed company registered in his name to Mr. Mehta. Mr. Mehta has failed to ‘get the shares registered in his name before the company declared and paid the dividend on the shares. Examine with reference to the provisions of Securities Contracts (Regulation) Act, 1956, whether Mr. Patel is entitled to retain the dividend even though he has transferred the shares before declaration of dividend. (5 marks) (c) The Rural Electrification Corporation, New Delhi issued 6 years bonds to public directly and not through any Stock Exchange. Whether the Rural Electrification Corporation can do so? Is it not a violation of Securities Contracts (Regulation) Act, 1956? (5 marks) Answer (a) Regulation 74(1) of Table A of Schedule I to the Companies Act, 1956 provides that save as otherwise expressly provided in the Companies Act, 1956, questions arising at any meeting of the Board shall be decided by a majority of votes. In the problem given in the question, the similar articles exist in the Articles of Association of ABC Ltd. In the given case, only 8 directors out of a total strength of 12 directors are present and out of those 8 directors present only 5 directors have exercised their votes. In such a case, only those directors who are present and vote on a motion are considered for determining whether the motion is carried or not. That means, only 5 directors who voted on the motion are to be considered. Accordingly, since number of directors who voted in favour of the motion being 3 is higher than the number of directors who voted against the motion being 2, the motion is carried or is considered to be passed by majority, unless it is a matter requiring unanimous voting as in the case of a resolution under Section 372A(2).
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FINAL EXAMINATION : NOVEMBER, 2004 64 (b) Section 27(1) of Securities Contracts (Regulation) Act, 1956 provides that a holder of security whose name appears on the books of the company, can legally receive and retain any dividend declared by the company even if he has transferred the security for a valuable consideration. However, he (holder) cannot receive or retain the dividend if the
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  • Spring '18
  • Rajit
  • Corporation, Types of companies, Public company, managing director

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