CA Inter Corp Laws — Revision Test Paper (RTP) — September 2025

Case Scenario 1 Kapoor Limited is a mid-sized listed manufacturing company incorporated in the year 2010 by R.D. Kapoor. Mr. Kapoor has two son, Mr. Vineet and Mr. Aditya. Both Mr. Aditya and Mr. Vineet are working as directors in Kapoor Limited. Kapoor Limited had some compliance issues in the past. In 2016–17, the company issued redeemable preference shares but later failed to pay dividends on them for some time. In September 2018, the company fixed this by clearing all its loans and paying the pending dividends to the preference shareholders. After resolving these issues, the company proposed to issue new equity shares with differential rights for the financial year 2019–20. As part of its broader capital raising strategy, the board of directors decided to issue three different securities: • a rights issue of equity shares to existing shareholders, • a new class of preference shares offered exclusively to current equity shareholders, and • a public issue of convertible debentures. So, for the rights issue, it prepares a simplified document omitting several disclosures required under section 26(1) and for the new preference shares, they created a detailed prospectus but excluded certain financial reporting. But for the convertible debentures, they prepare a complete prospectus with all section 26(1) requirements. Further, Ms. Roshni, a shareholder, owned 1,500 partly paid equity shares in the company (` 8 paid out of ` 10). On 5th July 2024, she applied to transfer 500 of these shares to Mr. Bakshi, who didn't know about it. The company sent him a notice on 10th July, 2024, which he received on 12th July, 2024. Since Mr. Bakshi was abroad, he saw the notice only on 20th July, 2024. After realizing the shares had unpaid amounts, he sent an objection email on 24th July, 2024. However, the company went ahead with the transfer on 27th July, 2024, saying his objection came too late. According to the company's rules, the Board can approve the transfer of partly paid shares if they believe the buyer can pay the remaining amount in the future. In another case, Mr. Varun, one of the shareholders of Kapoor Limited, is the legal representatives of a deceased shareholder, Mr. Kartik. He had written an application to the company, to transfer the shares (of Mr. Kartik) in his name. But Mr. Varun did not receive any reply from the company. Mr. Varun went to the company office to inquire about the same. The company refused to transfer the shares in his name, as he is not the registered member of the company. For your information, the company's financial position as of 31st March, 2024 is as follows: • Paid-up equity share capital: ` 200 crore (20 crore shares of ` 10 each) • Free reserves: ` 600 crore • Securities premium: ` 150 crore • Secured loans: ` 400 crore • Unsecured loans: ` 300 crore The Board of Directors approved a buy-back proposal on 15th September, 2024, to purchase 3 crore equity shares at ` 60 per share. The company had previously conducted a buy-back of 1 crore shares (` 10 crore) in August 2023 during the financial year 2023-24. The new buy-back is planned for October 2024, which falls in financial year 2024-25. The Chief Financial Officer has confirmed that post-buy-back, the debt-to-capital ratio would remain within prescribed limits, and the shares are fully paid-up. In the light of the stated facts and figures, answer the following Multiple Choice Questions, as per the provisions of the Companies Act, 2013: Since the default was made good in FY 2018-2019, the company considered to issue new equity share with differential rights. According to the provisions of the Companies Act, do you think the company is eligible to issue the shares for the financial year 2019-2020?

Case Scenario 1 (Kapoor Limited — refer Question 1 for full scenario) According to the provision of the Companies Act, do you consider the company's action of affecting the transfer of partly paid shares to Mr. Bakshi is valid?

Case Scenario 1 (Kapoor Limited — refer Question 1 for full scenario) According to the provision of the Companies Act, can the company deny transferring shares in Mr. Varun's name and what is the company's obligation?

Case Scenario 1 (Kapoor Limited — refer Question 1 for full scenario) Based on the buy-back limitations under the provision of the Companies Act, do you think the proposed buy-back is valid?

Case Scenario 1 (Kapoor Limited — refer Question 1 for full scenario) The company had earlier made buy-back of 1 crore shares in August 2023. Can it legally conduct another buy-back in October 2024?

Case Scenario 1 (Kapoor Limited — refer Question 1 for full scenario) Suppose, if Kapoor Limited's post-buy-back debt-to-equity ratio would have exceeded 2:1, which of the following is correct?

Samyak Solutions Limited held its Annual General Meeting (AGM) on 20th September, 2024 to adopt the financial statements for the financial year ending 31st March, 2024. However, due to lack of quorum, the meeting was adjourned and was finally held on 27th September, 2024. What is the last date for filing the Annual Return with the Registrar of Companies under the Companies Act, 2013?

Blue Leaf Limited, an Indian company with a total paid-up share capital of ` 50 crore, has a wide base of shareholders, including a large number residing in the Middle East. Out of its total capital, ` 15 crore worth of shares are held by members residing in Kuwait. To facilitate better maintenance of records and communication with its overseas shareholders, the company decides to open a foreign register in Kuwait containing the names and particulars of those members and other security holders residing there. The foreign register is formally opened on November 1, 2024. Which of the following actions is Blue Leaf Limited required to take in this context?

Ms. Smriti, an Indian national, recently won ` 41 lakh in an international online lottery. She now wishes to remit an equivalent of US $50,000 abroad to a foreign account using her lottery winnings. She approached her authorized dealer bank to request foreign exchange for this purpose. As per the provisions of the Foreign Exchange Management Act, 1999 and the relevant Rules, what is the correct position regarding Ms. Smriti's request to remit foreign exchange out of her lottery winnings?

What among the following could be considered in the term 'Immovable Property' as per the General Clauses Act, 1897? (i) The soil for making bricks (ii) Right to catch fish (iii) Right to drain water (iv) Doors and Windows of the house

On 30th June 2023, Sunrise Infratech Limited, raised secured deposits amounting to ` 160 crore from the public at an interest rate of 12% per annum, repayable after a period of 30 months. The company created charges within the prescribed time in favour of the trustees for depositors, securing the deposits by creating charges over the following assets: • Land and Building – ` 110 crore • Plant and Machinery – ` 30 crore • Factory Shed – ` 20 crore • Trademark – ` 20 crore • Goodwill – ` 30 crore You are required to examine the validity of the charges created, particularly considering the nature of the assets offered as security, with reference to the applicable provisions of the Companies Act, 2013.

The company, Fateh Limited, engaged in the business of electronics manufacturing, has a paid-up share capital of ` 12.50 crore and a shareholder base comprising 3,500 members. The company's equity shares are listed on a recognized stock exchange, and it has a history of strong shareholder participation in general meetings. On 10th May, 2025, the Board of Directors issued a notice convening the Annual General Meeting (AGM) to be held on Saturday, 13th June, 2025 at 11:00 AM at the company's registered office in Mangalore, for considering ordinary and special business items, including approval of the financial statements and appointment of a new independent director. On the scheduled date, however, the required quorum was not present. Consequently, the meeting was adjourned to the same time and place on the next Saturday, i.e., 20th June, 2025. (i) If only two members (in person) are present at the adjourned meeting on 20th June, 2025, will the meeting be validly held and its business transacted?

The company, Fateh Limited, engaged in the business of electronics manufacturing, has a paid-up share capital of ` 12.50 crore and a shareholder base comprising 3,500 members. The company's equity shares are listed on a recognized stock exchange, and it has a history of strong shareholder participation in general meetings. On 10th May, 2025, the Board of Directors issued a notice convening the Annual General Meeting (AGM) to be held on Saturday, 13th June, 2025 at 11:00 AM at the company's registered office in Mangalore, for considering ordinary and special business items, including approval of the financial statements and appointment of a new independent director. (ii) Assume that on 13th June, 2025, 16 members (in person) were present, but due to disorderly conduct by a few shareholders during the proceedings, the Chairman exercised his discretion and adjourned the meeting to 20th June, 2025. On that date, only three members (in person) attended the adjourned meeting. Would such a meeting be valid in terms of quorum requirements?

Stridewalk Limited, a listed company engaged in the manufacturing and export of premium shoes and accessories, has been undergoing financial restructuring over the past few years. After several years of operational losses and sluggish growth, the Board recently appointed a new Production Manager, Mr. Arjun Mehra, whose strategic improvements have helped to revive the company's margins and production efficiency. In light of the improved performance and renewed investors' confidence, the Board of Directors, at its meeting held on 20th April, 2025, resolved to recommend a final dividend of ` 50 lakh to its equity shareholders — a notable development as this would be the first dividend declaration in eight years. The financial data available is as follows: • Current year profit (after providing for depreciation and necessary reserves): ` 16 lakh • Accumulated profits / free reserves over the past eight years: ` 170 lakh • Paid-up share capital of the company: ` 680 lakh • The proposed dividend of ` 50 lakh is intended to be funded partly from the current year's profit and partly from the accumulated profits of previous years. As the current year's profits alone are not sufficient to meet the proposed dividend payout, the company plans to draw from free reserves as permitted under the Companies Act, 2013. With reference to the provisions of the Companies Act, 2013 and the Companies (Declaration and Payment of Dividend) Rules, 2014, examine whether the proposed dividend declaration by Stridewalk Limited complies with the legal conditions applicable in the case of inadequate profits.

New Sales Pvt. Limited, a company engaged in the business of trading heavy-duty paper tapes used in industrial packaging, has seen consistent growth over the past five years. The company's turnover for the financial year 2024–25 crossed ` 130 crore, with a net profit of ` 9.2 crore. During the same financial year, the company's long-serving Chief Financial Officer (CFO), Mr. Ram, retired in December 2024 due to prolonged health issues. Following his retirement, Mr. Shyam, a qualified Chartered Accountant with two decades of experience in financial reporting, was appointed as the new CFO in March 2025. Upon assuming his duties and reviewing the company's past financial records and statutory filings, Mr. Shyam noted certain material classification errors and omissions in the audited financial statements for the year 2021–22. Concerned about the potential implications of these discrepancies, Mr. Shyam advised the Board of Directors of New Sales Pvt. Limited to revise the financial statements for FY 2021–22, even though the financial statements had already been adopted by the shareholders and filed with the Registrar of Companies (RoC). With reference to the relevant provisions of the Companies Act, 2013, examine and advise whether New Sales Pvt. Limited is permitted to revise its financial statements for the financial year 2021–22.

Pride Pvt. Limited, a start-up by a few qualified professionals, was incorporated in 2018. The company is booming and favouring the younger generation to work. The Capital Structure of the company is as follows: Particulars INR (Crore) Authorised Share Capital 1,00,00,000 Equity Shares of ` 10 each 10 Issued, Subscribed and Paid-up Share Capital 50,00,000 Equity Shares of ` 10 each 5 Share Premium 1 General Reserve 3.52 Profit & Loss Account 1.58 The company decided to issue 30% of its equity share capital as sweat equity shares to a class of directors and permanent employees with the objective of motivating them and making them partners in the company's growth. The proposed sweat equity shares will be subject to a lock-in period of five years. Accordingly, the company passed a resolution in its general meeting authorizing the issuance of 15 lakh sweat equity shares at a current market price of ` 25 per share, to be issued for a consideration of ` 5 per share to the identified class of directors and employees. In light of the above facts and in accordance with the provisions of the Companies Act, 2013, examine the following: (i) Whether size of issue of sweat equity shares was appropriate?

Pride Pvt. Limited, a start-up by a few qualified professionals, was incorporated in 2018. The company is booming and favouring the younger generation to work. The Capital Structure of the company is as follows: Particulars INR (Crore) Authorised Share Capital 1,00,00,000 Equity Shares of ` 10 each 10 Issued, Subscribed and Paid-up Share Capital 50,00,000 Equity Shares of ` 10 each 5 Share Premium 1 General Reserve 3.52 Profit & Loss Account 1.58 The company decided to issue 30% of its equity share capital as sweat equity shares to a class of directors and permanent employees with the objective of motivating them and making them partners in the company's growth. The proposed sweat equity shares will be subject to a lock-in period of five years. Accordingly, the company passed a resolution in its general meeting authorizing the issuance of 15 lakh sweat equity shares at a current market price of ` 25 per share, to be issued for a consideration of ` 5 per share to the identified class of directors and employees. In light of the above facts and in accordance with the provisions of the Companies Act, 2013, examine the following: (ii) Whether lock-in period was justifiable?

Shubham Limited is the holding company of Vaibhav Pvt. Limited. As per the financial statements of Vaibhav Pvt. Limited for the financial year ending 31st March 2025, its turnover was ` 1.80 crore and its paid-up share capital was ` 80 lakh. The Board of Directors of Vaibhav Pvt. Limited intends to avail the status of a small company under the Companies Act, 2013. However, the Company Secretary advised the Board that Vaibhav Pvt. Limited cannot be classified as a small company. In light of the above facts, examine the correctness of the advice given by the Company Secretary with reference to the relevant provisions of the Companies Act, 2013.

Ravi and Neha, two entrepreneurs, plan to start a new Limited Liability Partnership (LLP) focused on AI-based software development. They decide to name their LLP as "NextGen AI Innovations LLP." Before proceeding with the incorporation, they want to ensure that their chosen name is available and reserved. They apply to the Registrar through the prescribed web-based platform and pay the required fee for name reservation. Describe the legal requirements as to the reservation of a name as per relevant provisions under the Limited Liability Partnership Act, 2008.

"No person shall be prosecuted and punished for the same offence more than once." Explain in the light of provisions of the General Clauses Act, 1897.

What is meant by beneficial construction in statutory interpretation? Under what circumstances the rule of beneficial construction is generally applied?

Ms. Pearl was an Indian citizen who got a job in a software company in USA. She went to USA and stayed there for 15 years. During her stay, she purchased a house in USA for her residence. Then due to some personal issues she moved back to India and joined a software company in India. As she had moved back to India, she let out her house in USA and deposited the obtained rent in her account in USA. Advise whether Ms. Pearl can purchase another house in USA from her account in USA? Give your answer referring to the provisions of the Foreign Exchange Management Act, 1999.