CLAT PG Preparation: Using the E-Book Effectively, Exams of Law

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Using the E-Book Effectively for CLAT PG Preparation

1. Start with Past Year Questions (PYQs) - First Step: Make reading past year questions (PYQs) your first step in CLAT PG preparation. This gives you a foundational understanding of the exam format and types of questions. - Initial Familiarity: Begin by quickly skimming through the past five years’ papers to get an overall sense of the exam’s scope and depth. 2. Analyze Each Judgment Carefully - In-Depth Analysis: Carefully analyze each judgment included in the questions. Understanding why a particular judgment was selected can help you predict similar judgments that might appear in future exams. - Research: Use this analysis to identify key legal principles and trends in judicial reasoning, which are crucial for building a strong foundation in law. 3. Understand the Examiner's Mindset - Question and Option Analysis: Read each question and its options thoroughly. Remember, the goal is not to test yourself initially but to understand the examiner's mindset. - Identifying Important Topics: This approach helps you figure out which topics are considered important by the examiners and should be prioritized in your study plan. 4. Recognize Patterns and Changes - Exam Structure: Pay attention to the pattern or structure of the exam over the years. Note any changes in question formats, topics, or emphasis areas. - Adaptability: Understanding these patterns helps you adapt to potential changes and surprises in upcoming exams. 5. Learn from Explanations - Deep Dive into Concepts: Don't just read the explanations provided in the e-book. Use them as a starting point to explore each concept further through other resources like books, bare acts, and videos. This comprehensive approach ensures a thorough understanding of the topics covered in the question papers.

Approaching Past Year Papers

1. Initial Skimming - Quick Review: Start by quickly skimming through the past year papers to familiarize yourself with the format and types of questions asked. - Marking Key Areas: Identify and mark the sections that seem most challenging or frequently tested. 2. Detailed Analysis

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• Learning from Mistakes: Use mistakes as learning opportunities. Understand why you got a question wrong and make sure you grasp the underlying concept to avoid repeating the mistake. By following these strategies, you can maximize the effectiveness of the e-book and enhance your preparation for the CLAT PG exam.

CLAT PG 2024 | Pg. 4

CLAT PG 2024 Question Paper

Total Paragraphs – 20 Total Questions – 120 Questions Per Paragraph – 6 Total Marks – 120 Marks for Correct Answer – 1 Marks for Incorrect Answer - - 0. Total Time: 2 Hours Add Notes Here:

CLAT PG 2024 | Pg. 6 Correct Answer: (C) Special Leave Petition (SLP) under Article 136 of the Constitution of India.

• Explanation for (A): This option is incorrect because section 423 pertains to appeals against the order of a Tribunal to the Appellate Tribunal, not to the Supreme Court.
• Explanation for (B): This option is incorrect because a Class Action Suit under Section 245 allows for collective legal action by members or depositors against the company, not an appeal to the Supreme Court.
• Explanation for (C): This is correct as SLP under Article 136 is the Supreme Court's discretionary power to hear appeals against any court or tribunal's decision in India.
• Explanation for (D): This option is incorrect because section 421 deals with appeals to the National Company Law Appellate Tribunal from orders of the Tribunal, not appeals to the Supreme Court.

2. Rule of ‘supremacy of majority’ in governing the affairs of a company has been settled in a very old leading case of Foss v. Harbottle (1843) 2 Hare 461. In India, which case diluted the majority rule and held that interest of the company was above the interest of its shareholders either majority or minority?

• (A) Rajahmundry Electric Supply Corporation Ltd. v. A. Nageshwara Rao.
• (B) Bagree Cereals v. Hanuman Prasad Bagri.
• (C) Shanti Prasad Jain v. Kalinga Tubes Ltd.
• (D) Needle Industries (India) Ltd. v. Needle Industries Newey (India) Holding Ltd. (Correct Answer) Correct Answer: (D) Needle Industries (India) Ltd. v. Needle Industries Newey (India) Holding Ltd.
• Explanation for (A): This case is not related to the dilution of the majority rule in corporate governance.
• Explanation for (B): This case did not address the supremacy of majority versus the company's interest principle.
• Explanation for (C): While important, this case did not serve as a landmark judgment for the interests of the company over the majority's interests.
• Explanation for (D): This is correct because it emphasized that the company's interests prevail over the majority's interests, establishing a precedent for protecting minority shareholders and the company itself.

3. While recommending “Separation of the Roles of Non-executive Chairperson and Managing Director/ CEO”, the Kotak Mahindra Committee quoted the following text: “given the importance and the particular nature of the chairmen’s role, it should in principle be separate from that of the chief executive. If the two roles are combined in one person, it represents a considerable concentration of power”. This quote refers to which of the following Committee Report?

CLAT PG 2024 | Pg. 7

• (A) Cohen Committee Report.
• (B) Cadbury Committee Report. (Correct Answer)
• (C) Hampel Committee Report.
• (D) Narayana Murthy Committee Report. Correct Answer: (B) Cadbury Committee Report
• Explanation for (A): The Cohen Committee did not specifically focus on the separation of the chairperson and CEO roles.
• Explanation for (B): Correct because the Cadbury Committee Report is known for its recommendations on corporate governance, including the separation of the roles of the chairperson and CEO/MD.
• Explanation for (C): While important, the Hampel Committee did not originate the quoted principle.
• Explanation for (D): The Narayana Murthy Committee focused on various aspects of corporate governance in India but the specific quote is directly from the Cadbury Committee.

4. Which of the following statement is true regarding share qualification requirement under section 244 for applying for relief from oppression/ mismanagement under section 241 of the Companies Act, 2013 (in the case of a company having a share capital)?

• (A) Members not less than 100 members of the company or 10% of the total number of its members, whichever is less or any member or members holding not less than 10% of the issued share capital of the company. (Correct Answer)
• (B) Members not less than 100 members of the company and 10% of the total number of its members or members holding not less than 10% of the issued share capital of the company.
• (C) Not less than 20% of the total number of its members.
• (D) Members not less than 50 members of the company and 5% of the total number of its members or members holding not less than 5% of the issued share capital of the company. Correct Answer: (A) Members not less than 100 members of the company or 10% of the total number of its members, whichever is less or any member or members holding not less than 10% of the issued share capital of the company.
• Explanation for (A): This is the accurate requirement under section 244 for members to apply for relief under section 241, providing two pathways based on the number of members or the percentage of issued share capital they hold.
• Explanation for (B): This option incorrectly combines criteria in a way that is not supported by the actual legislative text.

CLAT PG 2024 | Pg. 9 liabilities. Principles of listing, which I may later on discuss, is intended to assist public companies in identifying their obligations and responsibilities, which are continuing in nature, transparent in content and call for high degree of integrity. Obligations are imposed on the issuer on an ongoing basis. Public companies who are legally obliged to list their securities are deemed to accept the continuing obligations, by virtue of their application, prospectus and the subsequent maintenance of listing on a recognized stock exchange. Disclosure is the rule, there is no exception. Misleading public is a serious crime, which may attract civil and criminal liability. Listing of securities depends not upon one’s volition, but on statutory mandate. [Extract from Sahara India Real Estate Corporation Limited v. Securities and Exchange Board of India (SEBI), Para 89-91, Civil Appeal No. 9833/2011 (SC)]

6. Which among the following is not considered as a ‘prospectus’ under the Companies Act, 2013?
   • (A) Shelf prospectus
   • (B) Red herring prospectus
   • (C) Private placement offer letter
   • (D) Advertisement inviting offers from the public Correct Answer: (C) Private placement offer letter Explanation:
   • (A) Shelf Prospectus: Recognized under the Companies Act, 2013, as a prospectus that allows a company to issue securities without the need for a separate prospectus for each offering within a certain period.
   • (B) Red Herring Prospectus: A preliminary registration document filed with regulators before a public offering, detailing the company's operations and financials except for the final price and share size. It's considered a type of prospectus.
   • (C) Private Placement Offer Letter: Not considered a prospectus under the Companies Act, 2013, because it's a document used for private placements, targeting a select group of investors, and not the general public.
   • (D) Advertisement Inviting Offers from the Public: This can be seen as an attempt to attract public attention towards a public offering, aligning with the purpose of a prospectus to inform and attract investors from the general public.
7. In Sahara India Real Estate Corporation Limited v. SEBI, Sahara issued which of the following instruments to raise money?
   • (A) Shares
   • (B) Convertible preference shares
   • (C) Optionally fully convertible debentures
   • (D) Currency derivatives Correct Answer: (C) Optionally fully convertible debentures

CLAT PG 2024 | Pg. 10 Explanation:

• (A) Shares: Common stock representing ownership in a company; not the instrument used by Sahara in the cited case.
• (B) Convertible Preference Shares: Preference shares that can be converted into a fixed number of common shares, usually after a predetermined date; also not the instrument used by Sahara.
• (C) Optionally Fully Convertible Debentures (OFCDs): The instrument issued by Sahara, providing investors with the option to convert debentures into shares after a specific period.
• (D) Currency Derivatives: Financial contracts to buy or sell currencies at a future date; not related to the Sahara case.

8. In Sahara India Real Estate Corporation Limited v. SEBI, the company issued securities in violation of rules relating to:

• (A) Public issue under the Companies Act.
• (B) SEBI Disclosure Investor Protection Guidelines, 2000 read with Issue of Capital and Disclosure Guidelines, 2009.
• (C) Both the above
• (D) None of the above Correct Answer: (C) Both the above Explanation:
• (A) Public issue under the Companies Act: Sahara violated this by not following the proper public issue procedures.
• (B) SEBI Disclosure Investor Protection Guidelines, 2000 read with Issue of Capital and Disclosure Guidelines, 2009: Sahara's actions also violated SEBI guidelines designed to protect investors by ensuring transparency and disclosure.
• (C) Both the above: The correct answer, as Sahara's issuance of OFCDs contravened both sets of regulations.
• (D) None of the above: Incorrect, as Sahara clearly violated regulations from both the Companies Act and SEBI guidelines.

9. The Supreme Court of India in the Sahara case held:

• (A) SEBI, being a statutory regulator, does not have the power to investigate and adjudicate.
• (B) As per Companies Act and SEBI Act, 1992, SEBI has jurisdiction over both listed companies and companies which intend to get listed.
• (C) SEBI has no jurisdiction over public issuances of hybrid securities.
• (D) Powers of SEBI supersede that of Ministry of Corporate Affairs.

CLAT PG 2024 | Pg. 12 third rule was envisaged and that is that quasi-judicial enquiries must be held in good faith, without bias and not arbitrarily or unreasonably. But in the course of years many more subsidiary rules came to be added to the rules of natural justice. Till very recently it was the opinion of the courts that unless the authority concerned was required by the law under which it functioned to act judicially there was no room for the application of the rules of natural justice. The validity of that limitation is not questioned. If the purpose of the rules of natural justice is to prevent miscarriage of justice one fails to see why those rules should be made inapplicable to administrative enquiries. Often times it is not easy to draw the line that demarcates administrative enquiries from quasi-judicial enquiries. Enquiries which were considered administrative at one time are now being considered as quasi-judicial in character. Arriving at a just decision is the aim of both quasi-judicial enquiries as well as administrative enquiries. An unjust decision in an administrative enquiry may have more far reaching effect than a decision in a quasi-judicial enquiry as observed by this Court in Suresh Koshy George v. University of Kerala [Civil Appeal No. 990/68, decided on 15- 07 - 1968], the rules of natural justice are not embodied rules. What particular rule of natural justice should apply to a given case must depend to a great extent on the facts and circumstances of that case, the framework of the law under which the enquiry is held and the constitution of the Tribunal or body of persons appointed for that purpose. Whenever a complaint is made before a court that some principle of natural justice had been contravened the court has to decide whether the observance of that rule was necessary for a just decision on the facts of that case. [Extract from the judgment of the Supreme Court in A.K. Kraipak v. Union of India, (1969) 2 SCC 262, decided on April 29, 1969, hereafter ‘A.K. Kraipak’].

11. The decision in A.K. Kraipak is considered a landmark authority for which of the following propositions?
    • (A) There is no application of the principles of natural justice to purely administrative functions.
    • (B) The principles of natural justice are in an ever-evolving state of flux.
    • (C) The principles of natural justice do not differentiate between administrative and quasi-judicial functions.
    • (D) There is no application of the principles of natural justice to quasi-judicial functions. Correct Answer: (C) The principles of natural justice do not differentiate between administrative and quasi-judicial functions. Explanation:
    • (A) Incorrect because the A.K. Kraipak decision specifically challenges this notion by extending the application of natural justice principles beyond purely judicial or quasi- judicial contexts into administrative functions.
    • (B) While the principles of natural justice are indeed evolving, this choice does not directly address the key proposition established by the A.K. Kraipak decision regarding the non-differentiation between administrative and quasi-judicial functions.

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• (C) Correct as it directly reflects the essence of the A.K. Kraipak ruling, emphasizing that the principles of natural justice apply to both administrative and quasi-judicial functions, thereby challenging the traditional limitation of these principles.
• (D) Incorrect because the A.K. Kraipak decision does not suggest that principles of natural justice have no application to quasi-judicial functions; rather, it affirms their application across different types of functions.

12. The Court states in A.K. Kraipak that, ‘If the purpose of the rules of natural justice is to prevent miscarriage of justice one fails to see why those rules should be made inapplicable to administrative enquiries.’ Which of the following approaches to interpretation of statutes does the Court appear to adopt:

• (A) Literal Interpretation
• (B) Constructive Interpretation
• (C) Strict Interpretation
• (D) All of the above. Correct Answer: (B) Constructive Interpretation Explanation:
• (A) Literal Interpretation focuses strictly on the literal and plain meaning of the words used in the statute, which does not align with the court's rationale for extending natural justice principles.
• (B) Correct because Constructive Interpretation involves interpreting legal texts to fulfill the broader purpose and intentions behind them, which aligns with the court’s approach in seeking to prevent miscarriages of justice by applying principles of natural justice to administrative enquiries.
• (C) Strict Interpretation involves a narrow reading of legal texts, which does not reflect the court's broader purposive approach in this case.
• (D) Incorrect as the court's approach in this context specifically aligns with constructive interpretation, rather than strictly adhering to the literal or strict interpretation.

13. The Court states in A.K. Kraipak, that ‘… in the course of years many more subsidiary rules came to be added to the rules of natural justice.’ Which of the following is a later entrant to the principles of natural justice?

• (A) No one shall be a Judge in their own cause.
• (B) Duty to hear.
• (C) Duty to give reasons.
• (D) None of the above. Correct Answer: (C) Duty to give reasons.