Mock Test: Business Laws and Business Correspondence & Reporting(Paper-2) - Dec 2022 | Mock Tests & Past Year Papers for CA Foundation PDF Download

 Page 1


1 
MOCK TEST PAPER 1 
FOUNDATION COURSE 
PAPER 2: BUSINESS LAWS AND BUSINESS CORRESPONDENCE AND REPORTING 
SECTION A: BUSINESS LAWS 
Question No. 1 is compulsory.  
Answer any four questions from the remaining five questions.  
QUESTIONS 
1. (i)  Mr. Ram Lal Birla was a big businessman of Pune City having two sons and one married daughter. He 
decided to gift his house to his daughter. For this purpose, he called his lawyer at his house and made 
a written document for such gift. The lawyer advised him to get the transfer document properly 
registered. When they both were going for registration of document, they met with an accident, and 
both of them died. Later, the daughter found the document and claimed the house on the basis of that 
document.  Explain, whether she can get the house as gift under the Indian Contract Act, 1872? 
(4 Marks)  
(ii)  Articles of Association of XYZ Private Limited provides that Board of Directors can take the loan 
upto ` 50,00,000 for company by passing the Board Resolution. In the case where the loan 
amount is in excess of the said limit, Special Resolution is required to be passed in general 
meeting. Due to urgent need of funds, Board of Directors applied for loan in a reputed bank for  
` 60,00,000 without passing the Special Resolution in the general meeting. Board of Directors 
gave an undertaking to bank that Special Resolution has been passed for such loan. The bank on 
believing on such undertaking lend the money. On demanding the repayment of loan, company 
denied the payment as the act was ultra vires to company. Advise. (4 Marks)  
(iii)  “Nemo Dat Quod Non Habet” – “None can give or transfer goods what he does not himself own.” 
Explain the rule and state the cases in which the rule does not apply under the provisions of the 
Sale of Goods Act, 1930.      (4 Marks) 
2. (i) Explain the type of contracts in the following agreements under the Indian Contract Act, 1872: 
(a)  A coolie in uniform picks up the luggage of A to be carried out of the railway station without 
being asked by A and A allows him to do so.  
(b)  Obligation of finder of lost goods to return them to the true owner. 
(c)  A contract with B (owner of the factory) for the supply of 10 tons of sugar, but before the 
supply is affected, the fire caught in the factory, and everything was destroyed. (4 Marks) 
(ii)  “To form a valid contract, consideration must be adequate”. Comment.  (3 Marks) 
(iii)  What is Small Limited Liability Partnership as per Limited Liability Partnership (Amendment) Act, 
2021? (5 Marks) 
3. (i)  Mr. A (transferor) transfer his share in a partnership firm to Mr. B (transferee). Mr. B is not entitled for 
few rights and privileges as Mr. A (transferor) is entitled therefor. Discuss in brief the points for which 
Mr. B is not entitled during continuance of partnership? (4 Marks) 
(ii) What is Particular Partnership as per Indian Partnership Act, 1932? (2 Marks) 
(iii) Seema was running a boutique in New Delhi. She was to deliver some cloth to her friend Kiran 
who was putting up an exhibition at Mumbai. Seema delivered the sewing machine and some 
cloth to a railway company to be delivered at a place where the exhibition was to be held. Seema 
Page 2


1 
MOCK TEST PAPER 1 
FOUNDATION COURSE 
PAPER 2: BUSINESS LAWS AND BUSINESS CORRESPONDENCE AND REPORTING 
SECTION A: BUSINESS LAWS 
Question No. 1 is compulsory.  
Answer any four questions from the remaining five questions.  
QUESTIONS 
1. (i)  Mr. Ram Lal Birla was a big businessman of Pune City having two sons and one married daughter. He 
decided to gift his house to his daughter. For this purpose, he called his lawyer at his house and made 
a written document for such gift. The lawyer advised him to get the transfer document properly 
registered. When they both were going for registration of document, they met with an accident, and 
both of them died. Later, the daughter found the document and claimed the house on the basis of that 
document.  Explain, whether she can get the house as gift under the Indian Contract Act, 1872? 
(4 Marks)  
(ii)  Articles of Association of XYZ Private Limited provides that Board of Directors can take the loan 
upto ` 50,00,000 for company by passing the Board Resolution. In the case where the loan 
amount is in excess of the said limit, Special Resolution is required to be passed in general 
meeting. Due to urgent need of funds, Board of Directors applied for loan in a reputed bank for  
` 60,00,000 without passing the Special Resolution in the general meeting. Board of Directors 
gave an undertaking to bank that Special Resolution has been passed for such loan. The bank on 
believing on such undertaking lend the money. On demanding the repayment of loan, company 
denied the payment as the act was ultra vires to company. Advise. (4 Marks)  
(iii)  “Nemo Dat Quod Non Habet” – “None can give or transfer goods what he does not himself own.” 
Explain the rule and state the cases in which the rule does not apply under the provisions of the 
Sale of Goods Act, 1930.      (4 Marks) 
2. (i) Explain the type of contracts in the following agreements under the Indian Contract Act, 1872: 
(a)  A coolie in uniform picks up the luggage of A to be carried out of the railway station without 
being asked by A and A allows him to do so.  
(b)  Obligation of finder of lost goods to return them to the true owner. 
(c)  A contract with B (owner of the factory) for the supply of 10 tons of sugar, but before the 
supply is affected, the fire caught in the factory, and everything was destroyed. (4 Marks) 
(ii)  “To form a valid contract, consideration must be adequate”. Comment.  (3 Marks) 
(iii)  What is Small Limited Liability Partnership as per Limited Liability Partnership (Amendment) Act, 
2021? (5 Marks) 
3. (i)  Mr. A (transferor) transfer his share in a partnership firm to Mr. B (transferee). Mr. B is not entitled for 
few rights and privileges as Mr. A (transferor) is entitled therefor. Discuss in brief the points for which 
Mr. B is not entitled during continuance of partnership? (4 Marks) 
(ii) What is Particular Partnership as per Indian Partnership Act, 1932? (2 Marks) 
(iii) Seema was running a boutique in New Delhi. She was to deliver some cloth to her friend Kiran 
who was putting up an exhibition at Mumbai. Seema delivered the sewing machine and some 
cloth to a railway company to be delivered at a place where the exhibition was to be held. Seema 
2 
expected to earn an exceptional profit from the sales made at this exhibition however she did not 
bring this fact to the notice of the railway’s authorities. The goods were delivered at the place 
after the conclusion of the exhibition. On account of such breach of contract by railways 
authorities, can Seema recover the loss of profits? (6 Marks) 
4. (i) Explain the term “Delivery and its forms” under the Sale of Goods Act, 1930.                      (6 Marks) 
(ii)  P & Co. is registered as a partnership firm in 2018 with A, B and P as partners dealing in sale 
and purchase of motor vehicles. In April 2019, A dies. Now only B and P continue the firm a nd 
same business with same firm name P & Co. 
 In the month of December 2019, firm felt the need of expansion of business and sharing the 
burden of expenditure and investment. They thought of hiring a new partner with a mutual 
consent with each other. Hence in December 2019, the firm took a new partner S in the firm  
P & Co.  
 The firm has supplied large amount of material to one of the clients Mr. X for business purposes. 
In spite of regular reminders, X failed to pay the debts due to the firm.  
 In January 2020, firm filed a case against X in the name and behalf of P & Co. without fresh 
registration. With reference to Indian Partnership Act, 1932, discuss if the suit filed by the firm is 
maintainable? (6 Marks) 
5. (i)  Mr. X, a retailer is running a shop dealing in toys for children. Once, he purchased from a 
wholesaler number of toy cars in a sale by sample. A boy came to the retailers shop to buy few 
toys. The retailer sold one of those toy cars to a boy. When the boy tried to play with it, it broke 
into pieces because of a manufacturing defect therein and the boy was injured. Mr. X, the retailer 
was held bound to pay compensation to the boy because the child got injured due to the 
defective toy in his shop. Due to this incident, the retailer in his turn sued the wholesaler to claim 
indemnity from him.  
 With reference to the provisions of Sale of Goods Act, 1930 discuss if the retailer can claim 
compensation from wholesaler? (6 Marks) 
(ii) Can a non-profit organization be registered as a company under the Companies Act, 2013? If so, 
what procedure does it have to adopt? (6 Marks) 
6. (i)  What is Quasi Contract? Elaborate the cases which are deemed as Quasi Contract. (5 Marks) 
(ii)  Ms. Lucy while drafting partnership deed taken care of few important points. What are those 
points? She wants to know the list of information which must be part of partnership deed drafted 
by her. Also, give list of information to be included in partnership deed? (4 Marks) 
(iii) Mr. Sunny sold his business of cotton production to a cotton production company CPL Private 
Limited in which he held all the shares except one which was held by his wife. He is also the 
creditor in the company for a certain amount. He also got the insurance of the stock of cotton of 
CPL Private Limited but in his own name not in the name of company. After one month, all the 
stocks of the cotton of CPL Private Limited were destroyed by fire. Mr. Sunny filed the claim for 
such loss with the Insurance company. State with reasons that whether the insurance company is 
liable to pay the claim? (3 Marks) 
 
 
 
Page 3


1 
MOCK TEST PAPER 1 
FOUNDATION COURSE 
PAPER 2: BUSINESS LAWS AND BUSINESS CORRESPONDENCE AND REPORTING 
SECTION A: BUSINESS LAWS 
Question No. 1 is compulsory.  
Answer any four questions from the remaining five questions.  
QUESTIONS 
1. (i)  Mr. Ram Lal Birla was a big businessman of Pune City having two sons and one married daughter. He 
decided to gift his house to his daughter. For this purpose, he called his lawyer at his house and made 
a written document for such gift. The lawyer advised him to get the transfer document properly 
registered. When they both were going for registration of document, they met with an accident, and 
both of them died. Later, the daughter found the document and claimed the house on the basis of that 
document.  Explain, whether she can get the house as gift under the Indian Contract Act, 1872? 
(4 Marks)  
(ii)  Articles of Association of XYZ Private Limited provides that Board of Directors can take the loan 
upto ` 50,00,000 for company by passing the Board Resolution. In the case where the loan 
amount is in excess of the said limit, Special Resolution is required to be passed in general 
meeting. Due to urgent need of funds, Board of Directors applied for loan in a reputed bank for  
` 60,00,000 without passing the Special Resolution in the general meeting. Board of Directors 
gave an undertaking to bank that Special Resolution has been passed for such loan. The bank on 
believing on such undertaking lend the money. On demanding the repayment of loan, company 
denied the payment as the act was ultra vires to company. Advise. (4 Marks)  
(iii)  “Nemo Dat Quod Non Habet” – “None can give or transfer goods what he does not himself own.” 
Explain the rule and state the cases in which the rule does not apply under the provisions of the 
Sale of Goods Act, 1930.      (4 Marks) 
2. (i) Explain the type of contracts in the following agreements under the Indian Contract Act, 1872: 
(a)  A coolie in uniform picks up the luggage of A to be carried out of the railway station without 
being asked by A and A allows him to do so.  
(b)  Obligation of finder of lost goods to return them to the true owner. 
(c)  A contract with B (owner of the factory) for the supply of 10 tons of sugar, but before the 
supply is affected, the fire caught in the factory, and everything was destroyed. (4 Marks) 
(ii)  “To form a valid contract, consideration must be adequate”. Comment.  (3 Marks) 
(iii)  What is Small Limited Liability Partnership as per Limited Liability Partnership (Amendment) Act, 
2021? (5 Marks) 
3. (i)  Mr. A (transferor) transfer his share in a partnership firm to Mr. B (transferee). Mr. B is not entitled for 
few rights and privileges as Mr. A (transferor) is entitled therefor. Discuss in brief the points for which 
Mr. B is not entitled during continuance of partnership? (4 Marks) 
(ii) What is Particular Partnership as per Indian Partnership Act, 1932? (2 Marks) 
(iii) Seema was running a boutique in New Delhi. She was to deliver some cloth to her friend Kiran 
who was putting up an exhibition at Mumbai. Seema delivered the sewing machine and some 
cloth to a railway company to be delivered at a place where the exhibition was to be held. Seema 
2 
expected to earn an exceptional profit from the sales made at this exhibition however she did not 
bring this fact to the notice of the railway’s authorities. The goods were delivered at the place 
after the conclusion of the exhibition. On account of such breach of contract by railways 
authorities, can Seema recover the loss of profits? (6 Marks) 
4. (i) Explain the term “Delivery and its forms” under the Sale of Goods Act, 1930.                      (6 Marks) 
(ii)  P & Co. is registered as a partnership firm in 2018 with A, B and P as partners dealing in sale 
and purchase of motor vehicles. In April 2019, A dies. Now only B and P continue the firm a nd 
same business with same firm name P & Co. 
 In the month of December 2019, firm felt the need of expansion of business and sharing the 
burden of expenditure and investment. They thought of hiring a new partner with a mutual 
consent with each other. Hence in December 2019, the firm took a new partner S in the firm  
P & Co.  
 The firm has supplied large amount of material to one of the clients Mr. X for business purposes. 
In spite of regular reminders, X failed to pay the debts due to the firm.  
 In January 2020, firm filed a case against X in the name and behalf of P & Co. without fresh 
registration. With reference to Indian Partnership Act, 1932, discuss if the suit filed by the firm is 
maintainable? (6 Marks) 
5. (i)  Mr. X, a retailer is running a shop dealing in toys for children. Once, he purchased from a 
wholesaler number of toy cars in a sale by sample. A boy came to the retailers shop to buy few 
toys. The retailer sold one of those toy cars to a boy. When the boy tried to play with it, it broke 
into pieces because of a manufacturing defect therein and the boy was injured. Mr. X, the retailer 
was held bound to pay compensation to the boy because the child got injured due to the 
defective toy in his shop. Due to this incident, the retailer in his turn sued the wholesaler to claim 
indemnity from him.  
 With reference to the provisions of Sale of Goods Act, 1930 discuss if the retailer can claim 
compensation from wholesaler? (6 Marks) 
(ii) Can a non-profit organization be registered as a company under the Companies Act, 2013? If so, 
what procedure does it have to adopt? (6 Marks) 
6. (i)  What is Quasi Contract? Elaborate the cases which are deemed as Quasi Contract. (5 Marks) 
(ii)  Ms. Lucy while drafting partnership deed taken care of few important points. What are those 
points? She wants to know the list of information which must be part of partnership deed drafted 
by her. Also, give list of information to be included in partnership deed? (4 Marks) 
(iii) Mr. Sunny sold his business of cotton production to a cotton production company CPL Private 
Limited in which he held all the shares except one which was held by his wife. He is also the 
creditor in the company for a certain amount. He also got the insurance of the stock of cotton of 
CPL Private Limited but in his own name not in the name of company. After one month, all the 
stocks of the cotton of CPL Private Limited were destroyed by fire. Mr. Sunny filed the claim for 
such loss with the Insurance company. State with reasons that whether the insurance company is 
liable to pay the claim? (3 Marks) 
 
 
 
3 
SECTION-B: BUSINESS CORRESPONDENCE AND REPORTING  
Max Marks: 40 Marks 
Instructions 
The Question paper comprises of 5 questions of 10 Marks each. Question 1 is compulsory. Out of 2 
to 5, attempt any three. 
1.   (a)  Read the passage below and answer the questions that follow:  
 Given the standing of some of its institutions of higher learning, the IITs and IIMs, India is a potential 
knowledge power. Realising the potential, however, is not going to be easy. The impressive strides 
made by Sarva Shiksha Abhiyan (SSA) notwithstanding, universal access to quality school 
education a minimum necessary condition for any progress towards making India a knowledge 
society’, as the 2006 report of the National Knowledge Commission (NKC) puts it remains a distant 
goal. 
 There is yet no legislation at the national level to affirm the right to education, a fundamental right 
under the Constitution. The number of school buildings for elementary and secondary education 
falls far short of requirements and so does the number of qualified teachers. The pressure on 
government budgets, which forces governments to hire teachers on contract paying a pittance of 
a salary, is playing havoc with quality. While the incursion of the private sector in the field is 
providing some competition, mechanisms to enforce the required standards are lacking. 
 Not that there are no national standards or standards-enforcing agencies. We have the National 
Council for Educational Research and Training (NCERT) to bring out textbooks in various subjects 
for school education. The central government runs several model schools. The Central Board of 
Secondary Education (CBSE) conducts examinations for schools affiliated to it across the country. 
The states too have their school boards to conduct exams and enforce minimum standards. How 
even the standards vary widely. In their anxiety to show spectacular performance, some states are 
overly lenient in marking answer papers. 
 Questions arise even over the standards applied by CBSE. Going by the numbe r of students 
securing 90% or more in their higher secondary exam, it would appear India is on the brink of a 
knowledge revolution. The numbers are so large that the cut-off point for admission to top colleges 
is now above 90%. However, admissions to IITs and medical colleges are not based only on CBSE 
or state board exam results. Leading undergraduate colleges offering non-professional degree 
courses hold their own admission tests. Obviously, higher secondary school results are not taken 
to be a reliable index of the quality of a student’s learning capability or potential. 
 While scoring high marks or even 100 out of 100 may not be out of a good student’s reach in 
subjects like Mathematics or Physics, it is difficult to figure out the quality of the answers that fetch 
90% marks in Economics or English. The standards applied by higher secondary boards like CBSE 
seem to have been diluted to the point that leaves a big gap between what students learn at school 
and what they have to face on entering institutions of higher learning. Thriving teaching shops 
around the country promise to bridge that gap. 
 In an attempt to remedy the situation, NCERT had recently commissioned experts to rewrite 
textbooks on macro and microeconomics. Though not entirely free from blemishes, these new texts 
should go some way in helping beginners get acquainted with the basic concepts in the subject 
and their applications. 
 Not surprisingly, their introduction is facing roadblocks. Teachers do not like to be compelled to 
look at textbooks they are not familiar with. Those who revel in seeing students score 90% are 
wary of ushering in something that may stop the rush of such scores. Lastly, even teaching shops 
Page 4


1 
MOCK TEST PAPER 1 
FOUNDATION COURSE 
PAPER 2: BUSINESS LAWS AND BUSINESS CORRESPONDENCE AND REPORTING 
SECTION A: BUSINESS LAWS 
Question No. 1 is compulsory.  
Answer any four questions from the remaining five questions.  
QUESTIONS 
1. (i)  Mr. Ram Lal Birla was a big businessman of Pune City having two sons and one married daughter. He 
decided to gift his house to his daughter. For this purpose, he called his lawyer at his house and made 
a written document for such gift. The lawyer advised him to get the transfer document properly 
registered. When they both were going for registration of document, they met with an accident, and 
both of them died. Later, the daughter found the document and claimed the house on the basis of that 
document.  Explain, whether she can get the house as gift under the Indian Contract Act, 1872? 
(4 Marks)  
(ii)  Articles of Association of XYZ Private Limited provides that Board of Directors can take the loan 
upto ` 50,00,000 for company by passing the Board Resolution. In the case where the loan 
amount is in excess of the said limit, Special Resolution is required to be passed in general 
meeting. Due to urgent need of funds, Board of Directors applied for loan in a reputed bank for  
` 60,00,000 without passing the Special Resolution in the general meeting. Board of Directors 
gave an undertaking to bank that Special Resolution has been passed for such loan. The bank on 
believing on such undertaking lend the money. On demanding the repayment of loan, company 
denied the payment as the act was ultra vires to company. Advise. (4 Marks)  
(iii)  “Nemo Dat Quod Non Habet” – “None can give or transfer goods what he does not himself own.” 
Explain the rule and state the cases in which the rule does not apply under the provisions of the 
Sale of Goods Act, 1930.      (4 Marks) 
2. (i) Explain the type of contracts in the following agreements under the Indian Contract Act, 1872: 
(a)  A coolie in uniform picks up the luggage of A to be carried out of the railway station without 
being asked by A and A allows him to do so.  
(b)  Obligation of finder of lost goods to return them to the true owner. 
(c)  A contract with B (owner of the factory) for the supply of 10 tons of sugar, but before the 
supply is affected, the fire caught in the factory, and everything was destroyed. (4 Marks) 
(ii)  “To form a valid contract, consideration must be adequate”. Comment.  (3 Marks) 
(iii)  What is Small Limited Liability Partnership as per Limited Liability Partnership (Amendment) Act, 
2021? (5 Marks) 
3. (i)  Mr. A (transferor) transfer his share in a partnership firm to Mr. B (transferee). Mr. B is not entitled for 
few rights and privileges as Mr. A (transferor) is entitled therefor. Discuss in brief the points for which 
Mr. B is not entitled during continuance of partnership? (4 Marks) 
(ii) What is Particular Partnership as per Indian Partnership Act, 1932? (2 Marks) 
(iii) Seema was running a boutique in New Delhi. She was to deliver some cloth to her friend Kiran 
who was putting up an exhibition at Mumbai. Seema delivered the sewing machine and some 
cloth to a railway company to be delivered at a place where the exhibition was to be held. Seema 
2 
expected to earn an exceptional profit from the sales made at this exhibition however she did not 
bring this fact to the notice of the railway’s authorities. The goods were delivered at the place 
after the conclusion of the exhibition. On account of such breach of contract by railways 
authorities, can Seema recover the loss of profits? (6 Marks) 
4. (i) Explain the term “Delivery and its forms” under the Sale of Goods Act, 1930.                      (6 Marks) 
(ii)  P & Co. is registered as a partnership firm in 2018 with A, B and P as partners dealing in sale 
and purchase of motor vehicles. In April 2019, A dies. Now only B and P continue the firm a nd 
same business with same firm name P & Co. 
 In the month of December 2019, firm felt the need of expansion of business and sharing the 
burden of expenditure and investment. They thought of hiring a new partner with a mutual 
consent with each other. Hence in December 2019, the firm took a new partner S in the firm  
P & Co.  
 The firm has supplied large amount of material to one of the clients Mr. X for business purposes. 
In spite of regular reminders, X failed to pay the debts due to the firm.  
 In January 2020, firm filed a case against X in the name and behalf of P & Co. without fresh 
registration. With reference to Indian Partnership Act, 1932, discuss if the suit filed by the firm is 
maintainable? (6 Marks) 
5. (i)  Mr. X, a retailer is running a shop dealing in toys for children. Once, he purchased from a 
wholesaler number of toy cars in a sale by sample. A boy came to the retailers shop to buy few 
toys. The retailer sold one of those toy cars to a boy. When the boy tried to play with it, it broke 
into pieces because of a manufacturing defect therein and the boy was injured. Mr. X, the retailer 
was held bound to pay compensation to the boy because the child got injured due to the 
defective toy in his shop. Due to this incident, the retailer in his turn sued the wholesaler to claim 
indemnity from him.  
 With reference to the provisions of Sale of Goods Act, 1930 discuss if the retailer can claim 
compensation from wholesaler? (6 Marks) 
(ii) Can a non-profit organization be registered as a company under the Companies Act, 2013? If so, 
what procedure does it have to adopt? (6 Marks) 
6. (i)  What is Quasi Contract? Elaborate the cases which are deemed as Quasi Contract. (5 Marks) 
(ii)  Ms. Lucy while drafting partnership deed taken care of few important points. What are those 
points? She wants to know the list of information which must be part of partnership deed drafted 
by her. Also, give list of information to be included in partnership deed? (4 Marks) 
(iii) Mr. Sunny sold his business of cotton production to a cotton production company CPL Private 
Limited in which he held all the shares except one which was held by his wife. He is also the 
creditor in the company for a certain amount. He also got the insurance of the stock of cotton of 
CPL Private Limited but in his own name not in the name of company. After one month, all the 
stocks of the cotton of CPL Private Limited were destroyed by fire. Mr. Sunny filed the claim for 
such loss with the Insurance company. State with reasons that whether the insurance company is 
liable to pay the claim? (3 Marks) 
 
 
 
3 
SECTION-B: BUSINESS CORRESPONDENCE AND REPORTING  
Max Marks: 40 Marks 
Instructions 
The Question paper comprises of 5 questions of 10 Marks each. Question 1 is compulsory. Out of 2 
to 5, attempt any three. 
1.   (a)  Read the passage below and answer the questions that follow:  
 Given the standing of some of its institutions of higher learning, the IITs and IIMs, India is a potential 
knowledge power. Realising the potential, however, is not going to be easy. The impressive strides 
made by Sarva Shiksha Abhiyan (SSA) notwithstanding, universal access to quality school 
education a minimum necessary condition for any progress towards making India a knowledge 
society’, as the 2006 report of the National Knowledge Commission (NKC) puts it remains a distant 
goal. 
 There is yet no legislation at the national level to affirm the right to education, a fundamental right 
under the Constitution. The number of school buildings for elementary and secondary education 
falls far short of requirements and so does the number of qualified teachers. The pressure on 
government budgets, which forces governments to hire teachers on contract paying a pittance of 
a salary, is playing havoc with quality. While the incursion of the private sector in the field is 
providing some competition, mechanisms to enforce the required standards are lacking. 
 Not that there are no national standards or standards-enforcing agencies. We have the National 
Council for Educational Research and Training (NCERT) to bring out textbooks in various subjects 
for school education. The central government runs several model schools. The Central Board of 
Secondary Education (CBSE) conducts examinations for schools affiliated to it across the country. 
The states too have their school boards to conduct exams and enforce minimum standards. How 
even the standards vary widely. In their anxiety to show spectacular performance, some states are 
overly lenient in marking answer papers. 
 Questions arise even over the standards applied by CBSE. Going by the numbe r of students 
securing 90% or more in their higher secondary exam, it would appear India is on the brink of a 
knowledge revolution. The numbers are so large that the cut-off point for admission to top colleges 
is now above 90%. However, admissions to IITs and medical colleges are not based only on CBSE 
or state board exam results. Leading undergraduate colleges offering non-professional degree 
courses hold their own admission tests. Obviously, higher secondary school results are not taken 
to be a reliable index of the quality of a student’s learning capability or potential. 
 While scoring high marks or even 100 out of 100 may not be out of a good student’s reach in 
subjects like Mathematics or Physics, it is difficult to figure out the quality of the answers that fetch 
90% marks in Economics or English. The standards applied by higher secondary boards like CBSE 
seem to have been diluted to the point that leaves a big gap between what students learn at school 
and what they have to face on entering institutions of higher learning. Thriving teaching shops 
around the country promise to bridge that gap. 
 In an attempt to remedy the situation, NCERT had recently commissioned experts to rewrite 
textbooks on macro and microeconomics. Though not entirely free from blemishes, these new texts 
should go some way in helping beginners get acquainted with the basic concepts in the subject 
and their applications. 
 Not surprisingly, their introduction is facing roadblocks. Teachers do not like to be compelled to 
look at textbooks they are not familiar with. Those who revel in seeing students score 90% are 
wary of ushering in something that may stop the rush of such scores. Lastly, even teaching shops 
4 
see red as they fear loss of business if the higher secondary finalists can get their skills upgraded 
without buying their help. 
 One wonders if our Knowledge Commission is aware of these insidious impediments to India’s 
knowledge ambitions. 
1. Why is quality school education a distant goal?  (1 Mark) 
2. What is the tone of writer when he remarks: ‘India is on the brink of a knowledge revolution.’ 
(a) Optimistic 
(b) Imaginative 
(c) Sarcastic 
(d) Presumptuous  (1 Mark) 
3. What are some states doing for ensuring good performances?  (1 Mark) 
4. Why do teachers oppose the new textbooks?  (1 Mark) 
5.  Which of the following is the meaning of the word ‘stride’?  (1 Mark) 
(a) A long step  
(b) Fall short 
(c) Raise 
(d) Fall  
(b)  Read the following passage  
 1.  A good business letter is one that gets results. The best way to get results is to develop 
a letter that, in its appearance, style and content, conveys information efficiently. To 
perform this function, a business letter should be concise, clear and courte ous.  
2.  The business letter must be concise: don’t waste words. Little introduction or preliminary chat 
is necessary. Get to the point, make the point, and leave it. It is safe to assume that your 
letter is being read by a very busy person with all kinds of papers to deal with. Re-read and 
revise your message until the words and sentences you have used are precise. This takes 
time, but is a necessary part of a good business letter. A short business letter that makes its 
point quickly has much more impact on a reader than a long-winded, rambling exercise in 
creative writing. This does not mean that there is no place for style and even, on occasion, 
humour in the business letter. While it conveys a message in its contents, the letter also 
provides the reader with an impression of you, its author: the medium is part of the message.  
3.  The business letter must be clear. You should have a very firm idea of what you want to say, 
and you should let the reader know it. Use the structure of the letter — the introduction, 
paragraphs, topic sentences and conclusion — to guide the reader point by point from your 
thesis, through your reasoning, to your conclusion. Paragraph often to break up the page and 
to lend an air of organisation to the letter. Use an accepted business-letter format. Re-read 
what you have written from the point of view of someone who is seeing it for the first time and 
be sure that all explanations are adequate and all information is provided (including reference 
numbers, dates, and other identification). A clear message, clearly delivered, is the essence 
of business communication.  
4.  The business letter must be courteous. Sarcasm and insults are ineffective and can often 
work against you. If you are sure you are right, point that out as politely as possible, explain 
why you are right, and outline what the reader is expected to do about it. Another form of 
courtesy is taking care in your writing and typing of the business letter. Grammatical and 
Page 5


1 
MOCK TEST PAPER 1 
FOUNDATION COURSE 
PAPER 2: BUSINESS LAWS AND BUSINESS CORRESPONDENCE AND REPORTING 
SECTION A: BUSINESS LAWS 
Question No. 1 is compulsory.  
Answer any four questions from the remaining five questions.  
QUESTIONS 
1. (i)  Mr. Ram Lal Birla was a big businessman of Pune City having two sons and one married daughter. He 
decided to gift his house to his daughter. For this purpose, he called his lawyer at his house and made 
a written document for such gift. The lawyer advised him to get the transfer document properly 
registered. When they both were going for registration of document, they met with an accident, and 
both of them died. Later, the daughter found the document and claimed the house on the basis of that 
document.  Explain, whether she can get the house as gift under the Indian Contract Act, 1872? 
(4 Marks)  
(ii)  Articles of Association of XYZ Private Limited provides that Board of Directors can take the loan 
upto ` 50,00,000 for company by passing the Board Resolution. In the case where the loan 
amount is in excess of the said limit, Special Resolution is required to be passed in general 
meeting. Due to urgent need of funds, Board of Directors applied for loan in a reputed bank for  
` 60,00,000 without passing the Special Resolution in the general meeting. Board of Directors 
gave an undertaking to bank that Special Resolution has been passed for such loan. The bank on 
believing on such undertaking lend the money. On demanding the repayment of loan, company 
denied the payment as the act was ultra vires to company. Advise. (4 Marks)  
(iii)  “Nemo Dat Quod Non Habet” – “None can give or transfer goods what he does not himself own.” 
Explain the rule and state the cases in which the rule does not apply under the provisions of the 
Sale of Goods Act, 1930.      (4 Marks) 
2. (i) Explain the type of contracts in the following agreements under the Indian Contract Act, 1872: 
(a)  A coolie in uniform picks up the luggage of A to be carried out of the railway station without 
being asked by A and A allows him to do so.  
(b)  Obligation of finder of lost goods to return them to the true owner. 
(c)  A contract with B (owner of the factory) for the supply of 10 tons of sugar, but before the 
supply is affected, the fire caught in the factory, and everything was destroyed. (4 Marks) 
(ii)  “To form a valid contract, consideration must be adequate”. Comment.  (3 Marks) 
(iii)  What is Small Limited Liability Partnership as per Limited Liability Partnership (Amendment) Act, 
2021? (5 Marks) 
3. (i)  Mr. A (transferor) transfer his share in a partnership firm to Mr. B (transferee). Mr. B is not entitled for 
few rights and privileges as Mr. A (transferor) is entitled therefor. Discuss in brief the points for which 
Mr. B is not entitled during continuance of partnership? (4 Marks) 
(ii) What is Particular Partnership as per Indian Partnership Act, 1932? (2 Marks) 
(iii) Seema was running a boutique in New Delhi. She was to deliver some cloth to her friend Kiran 
who was putting up an exhibition at Mumbai. Seema delivered the sewing machine and some 
cloth to a railway company to be delivered at a place where the exhibition was to be held. Seema 
2 
expected to earn an exceptional profit from the sales made at this exhibition however she did not 
bring this fact to the notice of the railway’s authorities. The goods were delivered at the place 
after the conclusion of the exhibition. On account of such breach of contract by railways 
authorities, can Seema recover the loss of profits? (6 Marks) 
4. (i) Explain the term “Delivery and its forms” under the Sale of Goods Act, 1930.                      (6 Marks) 
(ii)  P & Co. is registered as a partnership firm in 2018 with A, B and P as partners dealing in sale 
and purchase of motor vehicles. In April 2019, A dies. Now only B and P continue the firm a nd 
same business with same firm name P & Co. 
 In the month of December 2019, firm felt the need of expansion of business and sharing the 
burden of expenditure and investment. They thought of hiring a new partner with a mutual 
consent with each other. Hence in December 2019, the firm took a new partner S in the firm  
P & Co.  
 The firm has supplied large amount of material to one of the clients Mr. X for business purposes. 
In spite of regular reminders, X failed to pay the debts due to the firm.  
 In January 2020, firm filed a case against X in the name and behalf of P & Co. without fresh 
registration. With reference to Indian Partnership Act, 1932, discuss if the suit filed by the firm is 
maintainable? (6 Marks) 
5. (i)  Mr. X, a retailer is running a shop dealing in toys for children. Once, he purchased from a 
wholesaler number of toy cars in a sale by sample. A boy came to the retailers shop to buy few 
toys. The retailer sold one of those toy cars to a boy. When the boy tried to play with it, it broke 
into pieces because of a manufacturing defect therein and the boy was injured. Mr. X, the retailer 
was held bound to pay compensation to the boy because the child got injured due to the 
defective toy in his shop. Due to this incident, the retailer in his turn sued the wholesaler to claim 
indemnity from him.  
 With reference to the provisions of Sale of Goods Act, 1930 discuss if the retailer can claim 
compensation from wholesaler? (6 Marks) 
(ii) Can a non-profit organization be registered as a company under the Companies Act, 2013? If so, 
what procedure does it have to adopt? (6 Marks) 
6. (i)  What is Quasi Contract? Elaborate the cases which are deemed as Quasi Contract. (5 Marks) 
(ii)  Ms. Lucy while drafting partnership deed taken care of few important points. What are those 
points? She wants to know the list of information which must be part of partnership deed drafted 
by her. Also, give list of information to be included in partnership deed? (4 Marks) 
(iii) Mr. Sunny sold his business of cotton production to a cotton production company CPL Private 
Limited in which he held all the shares except one which was held by his wife. He is also the 
creditor in the company for a certain amount. He also got the insurance of the stock of cotton of 
CPL Private Limited but in his own name not in the name of company. After one month, all the 
stocks of the cotton of CPL Private Limited were destroyed by fire. Mr. Sunny filed the claim for 
such loss with the Insurance company. State with reasons that whether the insurance company is 
liable to pay the claim? (3 Marks) 
 
 
 
3 
SECTION-B: BUSINESS CORRESPONDENCE AND REPORTING  
Max Marks: 40 Marks 
Instructions 
The Question paper comprises of 5 questions of 10 Marks each. Question 1 is compulsory. Out of 2 
to 5, attempt any three. 
1.   (a)  Read the passage below and answer the questions that follow:  
 Given the standing of some of its institutions of higher learning, the IITs and IIMs, India is a potential 
knowledge power. Realising the potential, however, is not going to be easy. The impressive strides 
made by Sarva Shiksha Abhiyan (SSA) notwithstanding, universal access to quality school 
education a minimum necessary condition for any progress towards making India a knowledge 
society’, as the 2006 report of the National Knowledge Commission (NKC) puts it remains a distant 
goal. 
 There is yet no legislation at the national level to affirm the right to education, a fundamental right 
under the Constitution. The number of school buildings for elementary and secondary education 
falls far short of requirements and so does the number of qualified teachers. The pressure on 
government budgets, which forces governments to hire teachers on contract paying a pittance of 
a salary, is playing havoc with quality. While the incursion of the private sector in the field is 
providing some competition, mechanisms to enforce the required standards are lacking. 
 Not that there are no national standards or standards-enforcing agencies. We have the National 
Council for Educational Research and Training (NCERT) to bring out textbooks in various subjects 
for school education. The central government runs several model schools. The Central Board of 
Secondary Education (CBSE) conducts examinations for schools affiliated to it across the country. 
The states too have their school boards to conduct exams and enforce minimum standards. How 
even the standards vary widely. In their anxiety to show spectacular performance, some states are 
overly lenient in marking answer papers. 
 Questions arise even over the standards applied by CBSE. Going by the numbe r of students 
securing 90% or more in their higher secondary exam, it would appear India is on the brink of a 
knowledge revolution. The numbers are so large that the cut-off point for admission to top colleges 
is now above 90%. However, admissions to IITs and medical colleges are not based only on CBSE 
or state board exam results. Leading undergraduate colleges offering non-professional degree 
courses hold their own admission tests. Obviously, higher secondary school results are not taken 
to be a reliable index of the quality of a student’s learning capability or potential. 
 While scoring high marks or even 100 out of 100 may not be out of a good student’s reach in 
subjects like Mathematics or Physics, it is difficult to figure out the quality of the answers that fetch 
90% marks in Economics or English. The standards applied by higher secondary boards like CBSE 
seem to have been diluted to the point that leaves a big gap between what students learn at school 
and what they have to face on entering institutions of higher learning. Thriving teaching shops 
around the country promise to bridge that gap. 
 In an attempt to remedy the situation, NCERT had recently commissioned experts to rewrite 
textbooks on macro and microeconomics. Though not entirely free from blemishes, these new texts 
should go some way in helping beginners get acquainted with the basic concepts in the subject 
and their applications. 
 Not surprisingly, their introduction is facing roadblocks. Teachers do not like to be compelled to 
look at textbooks they are not familiar with. Those who revel in seeing students score 90% are 
wary of ushering in something that may stop the rush of such scores. Lastly, even teaching shops 
4 
see red as they fear loss of business if the higher secondary finalists can get their skills upgraded 
without buying their help. 
 One wonders if our Knowledge Commission is aware of these insidious impediments to India’s 
knowledge ambitions. 
1. Why is quality school education a distant goal?  (1 Mark) 
2. What is the tone of writer when he remarks: ‘India is on the brink of a knowledge revolution.’ 
(a) Optimistic 
(b) Imaginative 
(c) Sarcastic 
(d) Presumptuous  (1 Mark) 
3. What are some states doing for ensuring good performances?  (1 Mark) 
4. Why do teachers oppose the new textbooks?  (1 Mark) 
5.  Which of the following is the meaning of the word ‘stride’?  (1 Mark) 
(a) A long step  
(b) Fall short 
(c) Raise 
(d) Fall  
(b)  Read the following passage  
 1.  A good business letter is one that gets results. The best way to get results is to develop 
a letter that, in its appearance, style and content, conveys information efficiently. To 
perform this function, a business letter should be concise, clear and courte ous.  
2.  The business letter must be concise: don’t waste words. Little introduction or preliminary chat 
is necessary. Get to the point, make the point, and leave it. It is safe to assume that your 
letter is being read by a very busy person with all kinds of papers to deal with. Re-read and 
revise your message until the words and sentences you have used are precise. This takes 
time, but is a necessary part of a good business letter. A short business letter that makes its 
point quickly has much more impact on a reader than a long-winded, rambling exercise in 
creative writing. This does not mean that there is no place for style and even, on occasion, 
humour in the business letter. While it conveys a message in its contents, the letter also 
provides the reader with an impression of you, its author: the medium is part of the message.  
3.  The business letter must be clear. You should have a very firm idea of what you want to say, 
and you should let the reader know it. Use the structure of the letter — the introduction, 
paragraphs, topic sentences and conclusion — to guide the reader point by point from your 
thesis, through your reasoning, to your conclusion. Paragraph often to break up the page and 
to lend an air of organisation to the letter. Use an accepted business-letter format. Re-read 
what you have written from the point of view of someone who is seeing it for the first time and 
be sure that all explanations are adequate and all information is provided (including reference 
numbers, dates, and other identification). A clear message, clearly delivered, is the essence 
of business communication.  
4.  The business letter must be courteous. Sarcasm and insults are ineffective and can often 
work against you. If you are sure you are right, point that out as politely as possible, explain 
why you are right, and outline what the reader is expected to do about it. Another form of 
courtesy is taking care in your writing and typing of the business letter. Grammatical and 
5 
spelling errors (even if you call them typing errors) tell a reader that you don’t think enough 
of him or can lower the reader’s opinion of your personality faster than anything you say, no 
matter how silly. There are excuses for ignorance; there are no excuses for sloppiness. 
5.  The business letter is your custom-made representative. It speaks for you and is a permanent 
record of your message. It can pay big dividends on the time you invest in giving it a concise 
message, a clear structure, and a courteous tone.  
(i) Make notes, sub-headings, abbreviations, wherever necessary giving a suitable title. 
 (3 Marks)  
(ii) Write a summary. (2 Marks) 
2. (a)  What do you understand by clarity and coherence in communication?  (2 Marks) 
 (b)  (i)  Choose the suitable synonym for the given word:       (1 Mark) 
Abeyance  
a. Suspension    
b. Persistence      
c. Continuation     
d.   Rigid  
(ii)  Choose the most suitable antonym for the given word:      (1 Mark) 
Morbid 
a. Healthy     
b. Liberal     
c. Progressive     
d. Stale 
(iii)  Change the following sentence into indirect speech: 
“Are you alone, my son?” asked a soft voice close behind me.     (1 Mark) 
(c)  Write a Précis and also give an appropriate title for the passage given below.      (5 Marks) 
 Before the outbreak of Covid-19, with more than one billion tourists travelling to an 
international destination every year, tourism had become a leading economic sector, 
contributed 9.8% of global GDP, represented 7% of the world's total exports and provided 320 
million jobs worldwide. The global pandemic, the first of its scale in a new era of 
interconnectedness, has put 100 million jobs at risk, many in micro, small, and medium-sized 
enterprises that employ a high share of women, who represent 54 percent of the tourism 
workforce, according to the United Nations World Tourism Organization (UNWTO). 
Furthermore, it has been estimated that there is a drop of international tourists of about 78%, 
causing a loss in export revenue of US $ 1.2 trillion and representing the largest decline in the 
tourism job cuts, which is about seven times the impact of the 9/11 incident (UNWTO, 2020.) 
Tourism-dependent countries will likely feel the negative impacts of the crisis for much longer 
than other economies. Contact-intensive services key to the tourism and travel sectors are 
disproportionately affected by the pandemic and will continue to struggle until people feel safe 
to travel again. Countries dependent on tourism are grappling with how to lure back visitors 
while avoiding new outbreaks of Covid-19. The solutions range from wooing the ultra-rich who 
can quarantine on their yachts to inviting people to stay for periods of up to a year and work 
virtually while enjoying a tropical view.