SEBI Grade A (Legal) Test 1 — Questions & Solutions
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Under the SAST Regulations 2011, an acquirer holding shares carrying voting rights makes an open offer triggered by crossing the initial threshold. What is the threshold of voting rights that, when acquired together with shares already held, obliges the acquirer to make an open offer (the initial 'creeping acquisition' entry trigger)?
a25% or more
b5% or more
c10% or more
d15% or more
Answer: A
Regulation 3(1) of the SAST Regulations 2011 requires an open offer when an acquirer, together with persons acting in concert, acquires shares entitling them to 25% or more of the voting rights; the earlier 15% trigger under the 1997 Regulations was raised to 25%.
Under Regulation 3(2) of the SAST Regulations 2011 (creeping acquisition), an acquirer already holding 26% to 75% of voting rights triggers an open offer if, in any financial year, he acquires additional voting rights exceeding what limit?
aMore than 2% of the voting rights
bMore than 5% of the voting rights
cMore than 10% of the voting rights
dAny acquisition whatsoever
Answer: B
Regulation 3(2) permits a holder between 25% and the maximum permissible non-public shareholding to acquire up to 5% additional voting rights in a financial year without an open offer; acquisition beyond 5% triggers the obligation.
Under the SAST Regulations 2011, the open offer size for a substantial acquisition (other than for delisting) must be for at least what percentage of the total shares of the target company?
a20%
b25%
c26%
d100%
Answer: C
Regulation 7(1) of the SAST Regulations 2011 prescribes a minimum open offer size of 26% of the total shares of the target company (raised from 20% under the 1997 Regulations).
Under the PIT Regulations 2015, 'unpublished price sensitive information' (UPSI) is defined with reference to information that is not generally available and which upon becoming available is likely to materially affect the price of the securities. The definition expressly lists certain categories. Which of the following is NOT among the categories enumerated in the definition of UPSI under Regulation 2(1)(n)?
aFinancial results
bChange in key managerial personnel
cDividends
dRoutine change in the company's registered office address
Answer: D
Regulation 2(1)(n) of the PIT Regulations 2015 enumerates financial results, dividends, change in capital structure, mergers/acquisitions/delistings, and changes in key managerial personnel; a routine change of registered office is not listed.
Under the PIT Regulations 2015, an 'insider' is defined as any person who is a connected person or who is in possession of or has access to UPSI. With respect to a connected person trading while in possession of UPSI, what is the legal effect created by Regulation 4(1)?
aIt raises a presumption that the trade was motivated by the UPSI, which the insider may rebut
bThe burden lies wholly on SEBI to prove intent to profit
cTrading by a connected person is per se valid if disclosed
dConnected persons are wholly exempt unless they are promoters
Answer: A
Regulation 4(1) of the PIT Regulations 2015 deems trading while in possession of UPSI as insider trading, and the proviso/Note creates a presumption against a connected person which he may rebut by establishing one of the listed defences.
In SEBI v. Kishore R. Ajmera (2016), the Supreme Court laid down the standard of proof and the role of circumstantial/preponderance reasoning in securities-market violations. Which proposition best reflects the Court's holding?
aSecurities violations must be proved beyond reasonable doubt as in a criminal trial
bA SEBI charge can be established on a preponderance of probabilities, inferring from circumstances and conduct as a logical, prudent person would
cDirect documentary proof of meeting of minds is indispensable for any violation
dSEBI cannot rely on broker-client trading patterns at all
Answer: B
In SEBI v. Kishore R. Ajmera (2016) the Supreme Court held that the standard is preponderance of probabilities and that fraud/manipulation may be inferred from surrounding circumstances and the test of a prudent man, not beyond reasonable doubt.
Section 15T of the SEBI Act 1992 provides for appeals to the Securities Appellate Tribunal (SAT). An appeal against an order of the Adjudicating Officer or the Board must ordinarily be filed within what period from the date the order is received?
a30 days
b60 days
c45 days
d90 days
Answer: C
Section 15T(3) of the SEBI Act 1992 prescribes a period of 45 days from the date of receipt of the order for filing an appeal to SAT, with the Tribunal empowered to condone delay on sufficient cause.
An order passed by the Securities Appellate Tribunal under the SEBI Act 1992 may be appealed to the Supreme Court. Under Section 15Z, such an appeal lies only on which ground?
aOn any question of fact or law
bOnly on the question of quantum of penalty
cOn grounds of natural justice alone
dOn a question of law arising out of the SAT order
Answer: D
Section 15Z of the SEBI Act 1992 confines an appeal to the Supreme Court from a SAT order to any question of law arising out of such order, filed within 60 days.
Under the Depositories Act 1996, with respect to securities held in dematerialised form in a depository, the depository is the 'registered owner' while the investor retains beneficial ownership. Which of the following correctly states the legal position regarding voting and other rights?
aThe beneficial owner is entitled to all the rights and benefits and is subject to all the liabilities in respect of the securities held
bThe depository, as registered owner, exercises all rights including voting
cBoth registered and beneficial owners vote jointly
dDematerialised securities carry no voting rights until rematerialised
Answer: A
Section 10(3) of the Depositories Act 1996 provides that the beneficial owner is entitled to all rights and benefits and is subject to all the liabilities in respect of his securities held by a depository.
Under the Securities Contracts (Regulation) Act 1956, the inclusive definition of 'securities' in Section 2(h) has been judicially and legislatively expanded. Which of the following is NOT included within 'securities' under Section 2(h)?
aDerivatives
bA contract of insurance (life policy)
cUnits of a collective investment scheme
dGovernment securities
Answer: B
Section 2(h) SCRA 1956 expressly includes shares, scrips, derivatives, units of CIS and Government securities, but a contract of insurance is not a 'security' under the SCRA.
In N. Narayanan v. Adjudicating Officer, SEBI (2013), the Supreme Court dealt with the liability of directors for fudged financial statements and market manipulation. Which principle did the Court affirm regarding non-executive/independent directors?
aIndependent directors can never be held liable for company misstatements
bOnly the company, not any director, can be penalised under SEBI law
cDirectors who are aware of and acquiesce in fraudulent diversion/fudging of accounts cannot escape liability merely by their designation
dLiability attaches only to the statutory auditors
Answer: C
In N. Narayanan v. SEBI (2013) the Supreme Court held that directors aware of and party to the fudging of accounts and fraud on investors cannot avoid liability merely by claiming a non-executive role, emphasising the gatekeeping duty of directors.
Under the PFUTP Regulations 2003, the practice known as 'synchronised trading' or 'circular trading' (matched reversing trades to create artificial volume) is challenged as manipulative. Which is the correct legal characterisation under SEBI jurisprudence?
aSynchronised trades are always per se fraudulent regardless of intent
bSuch trades fall outside PFUTP as they occur on the exchange screen
cOnly off-market transfers can be manipulative under PFUTP
dSynchronised/reversal trades are manipulative where they are not genuine and are intended to create a false or misleading appearance of trading
Answer: D
Under Regulations 3 and 4 of the PFUTP Regulations 2003 and SAT/SC jurisprudence (e.g., Ketan Parekh, SEBI v. Rakhi Trading), synchronised or circular trades become manipulative when not genuine and designed to create a false/misleading appearance of trading or price.
Section 11B of the SEBI Act 1992, as amended, empowers SEBI to issue directions and also to levy disgorgement. Which statement about disgorgement under SEBI law is correct?
aDisgorgement is an equitable, restitutionary measure aimed at depriving the wrongdoer of ill-gotten gains, and is not in the nature of a penalty
bDisgorgement is a punitive penalty over and above the wrongful gain
cDisgorgement can only be ordered by a criminal court
Disgorgement under Section 11B (Explanation) of the SEBI Act 1992 is a restitutionary/equitable remedy to strip wrongful gains or losses avoided, distinct from a punitive penalty, as recognised in Karvy and subsequent rulings.
Under the PIT Regulations 2015, the 'contra-trade' restriction on designated persons in the code of conduct prohibits a designated person who has executed a trade from undertaking an opposite transaction within what period?
aNext 7 days
bNext six months
cNext 30 days
dNext one year
Answer: B
Schedule B (code of conduct) to the PIT Regulations 2015 prohibits designated persons from executing a contra-trade within six months of an earlier transaction; any profit from contra-trade in that period is liable to be disgorged.
A private company allots shares to 250 persons in a single financial year through a private placement offer. Under the Companies Act, 2013, what is the legal consequence?
aThe allotment is valid since private companies are exempt from public offer rules
bThe allotment is void ab initio and the directors are personally liable to refund
cIt is deemed to be a public offer and the company must comply with the provisions applicable to a public offer of securities
dIt is valid provided the company subsequently converts into a public company within six months
Answer: C
Under Section 42 read with Section 25 of the Companies Act, 2013, a private placement offer to more than 200 persons (excluding QIBs and employees under ESOP) in a financial year is treated as a deemed public offer attracting public offer compliance.
Which of the following best states the position on the doctrine of constructive notice after enactment of Section 9 (effect of memorandum and articles) and related provisions of the Companies Act, 2013, regarding outsiders dealing with a company?
aConstructive notice has been wholly abolished and outsiders need not refer to the company's public documents
bBoth constructive notice and indoor management have been abolished by the 2013 Act
cIndoor management applies only to directors and not to outsiders
dThe doctrine of constructive notice operates, but the doctrine of indoor management protects bona fide outsiders dealing in good faith
Answer: D
Public registration of MOA/AOA gives constructive notice to outsiders, but the indoor management rule in Royal British Bank v. Turquand protects an outsider acting in good faith from internal procedural irregularities.
Under Section 188 of the Companies Act, 2013, a related party who is a member of the company:
aShall not vote on the resolution to approve any contract or arrangement in which such member is a related party
bMay vote on the resolution approving the related party transaction if it is in the ordinary course of business
cMay vote only with prior approval of the Central Government
dMay vote provided the transaction value is below Rs. 1 crore
Answer: A
Section 188(1), second proviso, of the Companies Act, 2013 bars a member who is a related party from voting on the resolution approving any contract or arrangement in which he is interested (subject to the exemption for companies where 90% or more members are relatives of promoters).
A company purports to enter into a contract that is wholly beyond the objects stated in its memorandum. Applying the principle in Ashbury Railway Carriage & Iron Co. v. Riche, the contract is:
aVoidable at the option of the company
bVoid ab initio and cannot be ratified even by unanimous consent of all the shareholders
cValid if subsequently ratified by an ordinary resolution
dValid if the other party acted in good faith
Answer: B
An ultra vires act, being beyond the company's objects clause, is void ab initio per Ashbury Railway Carriage & Iron Co. v. Riche and cannot be ratified even by the entire body of shareholders.
Under Section 7 of the Insolvency and Bankruptcy Code, 2016, when can a financial creditor initiate the corporate insolvency resolution process (CIRP)?
aOnly after obtaining a decree from a civil court establishing the debt
bOnly if the corporate debtor admits the debt in writing
cOn the occurrence of a default, by furnishing record of the default and proof of debt, irrespective of the corporate debtor's solvency
dOnly after issuing a statutory demand notice and waiting 21 days
Answer: C
Per Section 7 IBC and Innoventive Industries v. ICICI Bank, a financial creditor may trigger CIRP upon establishing the existence of a default and the debt; the adjudicating authority need not examine the debtor's overall solvency or any dispute as in operational debts.
Under Section 9 of the Insolvency and Bankruptcy Code, 2016, an operational creditor's application can be rejected by the adjudicating authority if:
aThe corporate debtor is a solvent going concern
bThe amount of default is less than Rs. 50 lakh
cThe operational creditor has not obtained a money decree
dNotice of a pre-existing dispute in relation to the operational debt was received before the demand notice
Answer: D
Under Section 9(5) IBC and Mobilox Innovations v. Kirusa Software, the existence of a genuine pre-existing dispute (raised before receipt of the demand notice) is a valid ground to reject an operational creditor's CIRP application.
Regarding the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016, which of the following is correctly excluded from its scope (post-2018 amendment / clarifications)?
aEnforcement of a personal guarantor's liability through proceedings against the surety
bContinuation of pending suits or proceedings against the corporate debtor
cRecovery of any property in possession of the corporate debtor by an owner or lessor
dInstitution of fresh suits against the corporate debtor
Answer: A
Section 14(3)(b) IBC and State Bank of India v. V. Ramakrishnan clarify that the moratorium does not extend to a surety/personal guarantor; the other actions listed are stayed against the corporate debtor.
In the 'waterfall mechanism' for distribution of liquidation proceeds under Section 53 of the Insolvency and Bankruptcy Code, 2016, which of the following ranks higher in priority?
aGovernment dues (e.g., amounts due to the Central or State Government)
bWorkmen's dues for the period of 24 months preceding the liquidation commencement date
cUnsecured financial creditors
dEquity shareholders
Answer: B
Under Section 53(1) IBC, workmen's dues (for 24 months) along with debts owed to secured creditors who relinquished security rank in the second tier, above unsecured financial creditors, government dues, and equity—after only CIRP/liquidation costs.
Under Section 29A of the Insolvency and Bankruptcy Code, 2016, which person is generally ineligible to submit a resolution plan?
aA scheduled commercial bank that is a financial creditor of the corporate debtor
bAny resolution applicant who is a foreign company
cA person who is, or whose connected person is, the promoter of, or in management/control of, a corporate debtor whose account has been classified as a non-performing asset for one year or more and who has not cleared the overdue amounts
dA person who has previously submitted a resolution plan for another corporate debtor
Answer: C
Section 29A(c) IBC disqualifies a resolution applicant (and connected persons) who is the promoter/in control of a corporate debtor whose account has been an NPA for one year or more unless the overdue amounts (with interest and charges) are paid before submission of the plan.
Under Section 18 of the Limited Liability Partnership Act, 2008 and the scheme of the Act, the liability of a partner of an LLP for the wrongful acts of another partner is:
aJoint and several without any limitation, as in a general partnership
bLimited only to the extent of the unpaid capital contribution of the wrongdoing partner
cDetermined entirely by the LLP agreement and cannot be enforced by third parties
dLimited, in that a partner is not personally liable, directly or indirectly, for an obligation of the LLP solely by reason of being a partner
Answer: D
Section 27/28 of the LLP Act, 2008 provide that an LLP's obligations are solely its own and a partner is not personally liable merely by being a partner, distinguishing an LLP from a general partnership where liability is unlimited.
Q25Constitution of India
A State law was challenged as violating Article 14 on the ground that it classified industrial establishments by the number of workers employed. The classification will be upheld only if it satisfies which test?
aThe classification is based on an intelligible differentia having a rational nexus to the object sought to be achieved by the law
bThe classification treats every person identically without any distinction whatsoever
cThe classification has the prior approval of the President under Article 31C
dThe classification is shown to be the only conceivable method of achieving the object
Answer: A
Under the twin-test for permissible classification laid down in State of West Bengal v. Anwar Ali Sarkar and Ram Krishna Dalmia v. Justice Tendolkar, Article 14 permits reasonable classification founded on an intelligible differentia bearing a rational nexus to the object of the law.
Q26Constitution of India
Parliament enacts a law applicable only to the territory comprised in the Union Territory of Lakshadweep and not to the rest of India. The contention that this offends Article 14 is best met by which principle?
aArticle 14 is wholly inapplicable to Union Territories
bA law may be confined to a particular area if the special circumstances of that area furnish a reasonable basis for the differential treatment
cGeographical classification is per se invalid under Article 14
dOnly Parliament, never a State legislature, can make territorially limited laws
Answer: B
Article 14 permits territorial or geographical classification where the special conditions of an area constitute a reasonable basis for separate treatment, as recognised in Clarence Pais and earlier in Charanjit Lal Chowdhury, since equal protection does not require uniform laws across all areas.
Q27Constitution of India
X, a citizen, is denied admission to a State-run college solely because he is a resident of another State. Which fundamental right is most directly violated?
aArticle 16(2), which deals only with public employment
bArticle 15(1), which lists 'residence' as a prohibited ground
cArticle 15(1) read with the bar on discrimination on the ground 'only of place of birth'
dArticle 19(1)(d), the right to move freely throughout the territory of India
Answer: C
Article 15(1) forbids the State from discriminating against any citizen on grounds 'only of religion, race, caste, sex, place of birth or any of them'; residence is not a listed ground (note D.P. Joshi v. State of M.P.), so denial based on being a resident of another State is challenged as place-of-birth/Article 15(1) discrimination, not under Article 16(2) which governs employment.
Q28Constitution of India
A statute imposes a complete ban on the slaughter of cows and their progeny but permits, after a study of utility, slaughter of buffaloes beyond a certain age. A challenge under Article 19(1)(g) by butchers is most likely to be decided on which basis?
aAny total prohibition of a trade is automatically an unreasonable restriction
bThe ban is valid only if it furthers a Directive Principle, regardless of reasonableness
cTrade in animals falls outside Article 19(1)(g) altogether
dA total ban on slaughter of cattle that have ceased to be useful is unreasonable, but a ban on useful milch/draught cattle is a reasonable restriction in the interest of the general public
Answer: D
In Mohd. Hanif Quareshi and later State of Gujarat v. Mirzapur Moti Kureshi Kassab Jamat, the Court upheld restrictions on slaughter of useful cattle as reasonable under Article 19(6) read with Article 48, the latter case upholding even a total ban on cow progeny.
Q29Constitution of India
A preventive detention order is made under a law referable to Article 22. Which of the following safeguards is NOT available to a person detained under a preventive detention law?
aThe right to consult and be defended by a legal practitioner of his choice at the stage of detention
bThe right to be informed, as soon as may be, of the grounds of detention
cThe right to make a representation against the order
dReference of the case to an Advisory Board where detention exceeds the prescribed period, save where Parliament provides otherwise
Answer: A
Article 22(3)(b) expressly excludes preventive detention from the protections in Article 22(1) and (2), including the right to consult and be defended by a legal practitioner of one's choice; the detenu retains rights to grounds (22(5)), representation, and Advisory Board review (22(4)).
Q30Constitution of India
The Governor of a State, while a Bill is presented for assent under Article 200, reserves it for the consideration of the President. After the President withholds assent and directs the Governor to return it with a message, the Houses pass it again with the suggested amendments. What follows?
aThe Governor is bound to assent to the re-passed Bill within one month
bThere is no constitutional obligation on the President to give assent even to the re-passed Bill
cThe Bill becomes law automatically without any further assent
dThe matter must be referred to the Supreme Court under Article 143
Answer: B
Under Article 201, when a Bill reserved for the President is returned for reconsideration and re-passed, the President is not bound by the second proviso to give assent; unlike the Governor under the proviso to Article 200, the President retains discretion.
Q31Constitution of India
An ordinary money Bill is passed by the Lok Sabha and transmitted to the Rajya Sabha. The Rajya Sabha neither returns it with recommendations nor passes it within 14 days. What is the legal consequence?
aThe Bill lapses and must be reintroduced
bA joint sitting of both Houses must be convened
cThe Bill is deemed to have been passed by both Houses in the form in which it was passed by the Lok Sabha
dThe President must refer the Bill back to the Lok Sabha
Answer: C
Under Article 109(5), if the Rajya Sabha does not return a Money Bill within fourteen days of receipt, it is deemed to have been passed by both Houses at the expiry of that period in the form passed by the Lok Sabha.
Q32Constitution of India
A constitutional amendment seeks to curtail the power of judicial review of the High Courts and the Supreme Court. The validity of such an amendment will be tested against which doctrine?
aThe doctrine of pleasure
bThe doctrine of colourable legislation
cThe doctrine of eclipse
dThe basic structure doctrine, judicial review being part of the basic structure
Answer: D
Since Kesavananda Bharati and as reaffirmed in Minerva Mills and L. Chandra Kumar, judicial review under Articles 32 and 226 is part of the basic structure and a constitutional amendment cannot abrogate it.
Q33Criminal Law — Bharatiya Nyaya Sanhita 2023 & Bharatiya Nagarik Suraksha Sanhita 2023 (use NEW code sections)
Under the Bharatiya Nyaya Sanhita, 2023, the newly introduced offence of organised crime is dealt with under which provision, and what is the minimum punishment where such an offence has resulted in the death of any person?
aSection 111; death or imprisonment for life, and fine not less than ten lakh rupees
bSection 112; rigorous imprisonment for seven years
cSection 113; imprisonment for life only
dSection 109; death or imprisonment for life with fine of five lakh rupees
Answer: A
Section 111 BNS, 2023 defines and punishes organised crime; where it results in death, the punishment is death or imprisonment for life and fine not less than ten lakh rupees. Section 112 separately deals with petty organised crime.
Q34Criminal Law — Bharatiya Nyaya Sanhita 2023 & Bharatiya Nagarik Suraksha Sanhita 2023 (use NEW code sections)
The BNS, 2023 introduces a distinct offence of 'terrorist act'. Which section contains this offence, and what is the key jurisdictional feature distinguishing its applicability from the UAPA route?
aSection 110; it applies only to acts committed outside India
bSection 113; a designated officer not below the rank of Superintendent of Police decides whether to register the case under BNS or UAPA
cSection 111; only the NIA can invoke it
dSection 152; it requires prior sanction of the Central Government in every case
Answer: B
Section 113 BNS, 2023 creates the terrorist act offence; an officer not below the rank of Superintendent of Police decides whether a given case is registered under BNS or under the UAPA, 1967.
Q35Criminal Law — Bharatiya Nyaya Sanhita 2023 & Bharatiya Nagarik Suraksha Sanhita 2023 (use NEW code sections)
A man, intending to cause the death of A, fires a shot which misses A but kills B, who was standing nearby and whom the man neither saw nor intended to harm. Under the BNS, 2023, what is his liability?
aCulpable homicide not amounting to murder only, as he had no intention to kill B
bNo offence against B, as B was an unintended victim
cMurder of B, by operation of the doctrine of transferred malice under Section 101 read with the general principle
dOnly an attempt to murder A and grievous hurt to B
Answer: C
Under the doctrine of transferred malice, the intent to kill A is transferred to the actual victim B; the act causing death with such intention is murder (Section 101 BNS, 2023, corresponding to former Section 301 IPC principle).
Q36Criminal Law — Bharatiya Nyaya Sanhita 2023 & Bharatiya Nagarik Suraksha Sanhita 2023 (use NEW code sections)
Under Section 103(2) of the BNS, 2023 (mob lynching), what is the prescribed punishment where a group of five or more persons acting in concert commits murder on the ground of race, caste, community, sex, place of birth, language or personal belief?
aImprisonment for not less than three years
bImprisonment for life only
cRigorous imprisonment for ten years and fine
dDeath or imprisonment for life, and fine, for each member of the group
Answer: D
Section 103(2) BNS, 2023 provides that where five or more persons jointly commit murder on the specified discriminatory grounds, each such person is punishable with death or imprisonment for life and fine.
Q37Criminal Law — Bharatiya Nyaya Sanhita 2023 & Bharatiya Nagarik Suraksha Sanhita 2023 (use NEW code sections)
The BNS, 2023 introduced a separate offence for causing death by negligence by a registered medical practitioner while performing a medical procedure. Which of the following correctly states the position under Section 106?
aA registered medical practitioner causing death by a negligent act in a medical procedure is punishable with up to two years and fine, distinct from the general up-to-five-years provision
bA medical practitioner enjoys complete immunity for death caused during a procedure
cSuch a practitioner is liable to imprisonment for life
dThe offence applies only to surgeons, not physicians
Answer: A
Section 106(1) BNS, 2023 punishes causing death by negligence generally with up to five years, but provides a lighter maximum of two years (with fine) for a registered medical practitioner who causes death by a negligent act while doing a medical procedure.
Q38Criminal Law — Bharatiya Nyaya Sanhita 2023 & Bharatiya Nagarik Suraksha Sanhita 2023 (use NEW code sections)
Under the BNS, 2023, a new provision punishes a person who, by deceitful means or by making a false promise to marry a woman without any intention of fulfilling it, has sexual intercourse with her, such intercourse not amounting to rape. Which section and punishment apply?
aSection 64; imprisonment for life
bSection 69; imprisonment up to ten years and fine
cSection 70; death penalty
dSection 75; imprisonment up to three years
Answer: B
Section 69 BNS, 2023 is a wholly new offence punishing sexual intercourse obtained by deceitful means or a false promise of marriage (including employment, promotion or marrying by suppressing identity), with imprisonment up to ten years and fine.
Q39Criminal Law — Bharatiya Nyaya Sanhita 2023 & Bharatiya Nagarik Suraksha Sanhita 2023 (use NEW code sections)
Under Section 4 of the BNS, 2023, which of the following is a punishment that did NOT exist in the Indian Penal Code, 1860 and has been newly added as a form of punishment?
aSolitary confinement
bForfeiture of property
cCommunity service
dImprisonment for life
Answer: C
Section 4 BNS, 2023 lists 'community service' as a new form of punishment not found in the IPC; it is prescribed for certain petty offences such as attempt to commit suicide to compel a public servant and petty theft on first conviction.
Q40Contract & allied — Indian Contract Act 1872, Sale of Goods Act 1930, Partnership Act 1932, Specific Relief Act 1963
A advertises a reward of Rs. 1,000 to anyone who finds and returns his lost dog. B, who does not know of the advertisement, finds and returns the dog. Can B claim the reward?
aYes, because performance of the act is sufficient to claim the reward
bYes, because the offer was made to the world at large
cNo, because a reward advertisement is not a valid offer
dNo, because there can be no acceptance without knowledge of the offer
Answer: D
Acceptance presupposes knowledge of the offer; one cannot accept an offer one is unaware of (Lalman Shukla v. Gauri Datt). Section 2(b) of the Indian Contract Act, 1872 requires assent to a known proposal.
Q41Contract & allied — Indian Contract Act 1872, Sale of Goods Act 1930, Partnership Act 1932, Specific Relief Act 1963
A agrees to sell B his car. Unknown to both parties, the car had been destroyed by fire at the time of the agreement. The agreement is:
aVoid on account of mutual mistake as to existence of the subject matter
bVoidable at the option of B
cValid but discharged by frustration
dEnforceable as the risk had passed to B
Answer: A
Under Section 20 of the Indian Contract Act, 1872, an agreement made under a mutual mistake of fact essential to the agreement (here, existence of the subject matter) is void.
Q42Contract & allied — Indian Contract Act 1872, Sale of Goods Act 1930, Partnership Act 1932, Specific Relief Act 1963
A minor fraudulently represents himself to be of full age and borrows money. On default, the lender sues. Which statement is correct?
aThe minor is personally liable to repay because of his fraud
bThe agreement is void ab initio and the minor cannot be compelled to repay, nor is there estoppel against him
cThe agreement is voidable at the lender's option
dThe minor is liable on the principle of restitution in all cases
Answer: B
An agreement by a minor is void ab initio (Mohori Bibee v. Dharmodas Ghose); there is no estoppel against a minor and he cannot be made to repay borrowed money as a contractual debt, though equitable restitution of identifiable property may apply.
Q43Contract & allied — Indian Contract Act 1872, Sale of Goods Act 1930, Partnership Act 1932, Specific Relief Act 1963
A contracts with B to deliver 100 bags of rice on a future date. Before delivery, A informs B that he will not perform. Which remedy is NOT available to B immediately?
aTreat the contract as rescinded and sue for damages at once
bWait till the date of performance and then sue
cCompel A to specifically perform before the due date arrives without electing to treat the breach as final
dInsist on performance and keep the contract alive
Answer: C
On anticipatory breach (Section 39, Indian Contract Act, 1872), the promisee may either rescind and sue immediately or keep the contract alive and await performance, but cannot enforce performance while it remains an executory future obligation that has not yet fallen due in that manner.
Q44Contract & allied — Indian Contract Act 1872, Sale of Goods Act 1930, Partnership Act 1932, Specific Relief Act 1963
A contracts to sing for B at a concert for Rs. 1,000, payable in advance. A is too ill to sing. Which is correct?
aB may sue A for breach and recover the Rs. 1,000 plus damages
bA must pay B damages for non-performance despite illness
cB may compel specific performance of the singing engagement
dThe contract is void due to impossibility and B may recover the advance paid
Answer: D
Performance becomes impossible by A's illness, a supervening event; under Section 56 of the Indian Contract Act, 1872 the contract becomes void, and the advance is recoverable under Section 65.
Q45Contract & allied — Indian Contract Act 1872, Sale of Goods Act 1930, Partnership Act 1932, Specific Relief Act 1963
Under Section 25 of the Indian Contract Act, 1872, an agreement made without consideration is valid in which of the following situations?
aA written and registered promise made out of natural love and affection between parties standing in near relation
bA promise to pay a time-barred debt made orally
cA promise to pay a debt barred by limitation made by the debtor's son
dAny promise to compensate a person who has voluntarily done something for the promisor
Answer: A
Section 25(1) validates an agreement without consideration if it is in writing, registered, and made on account of natural love and affection between parties in near relation. A time-barred debt promise must be in writing and signed (Section 25(3)).
Q46Contract & allied — Indian Contract Act 1872, Sale of Goods Act 1930, Partnership Act 1932, Specific Relief Act 1963
A, a surety, guarantees B's debt to C. Without A's consent, C and B agree to give B more time to pay. What is the effect on A's liability?
aA continues to be liable as the variance benefits the debtor
bA is discharged from liability
cA's liability is merely suspended until the extended period ends
dA remains liable but only to the extent of the original due date
Answer: B
Under Section 135 of the Indian Contract Act, 1872, a contract between the creditor and principal debtor by which the creditor agrees to give time to the debtor discharges the surety, unless the surety assents to it.
Q47Code of Civil Procedure, 1908
A defendant fails to file a written statement within the time fixed by the court. Under Order VIII Rule 1 CPC (as amended in 2002), what is the maximum outer limit beyond which the court ordinarily cannot extend the time for filing the written statement from the date of service of summons in a non-commercial suit?
a30 days
b60 days
c90 days
d120 days
Answer: C
Order VIII Rule 1 requires the written statement within 30 days, extendable by the court but not beyond 90 days from the date of service of summons; the Supreme Court in Kailash v. Nanhku held this period directory for ordinary suits.
Q48Code of Civil Procedure, 1908
Plaintiff sues in a court that has no territorial jurisdiction, and the defendant does not raise the objection at the first opportunity before the trial court. The appellate court is asked to set aside the decree on this ground. Under Section 21 CPC, the objection will succeed only if:
aIt is shown that the court lacked pecuniary jurisdiction as well
bThe defendant had not entered appearance in the suit
cThe decree exceeds the pecuniary limits of the trial court
dIt was taken at the earliest possible opportunity and there has been a consequent failure of justice
Answer: D
Section 21(1) bars objections as to place of suing taken for the first time in appeal unless raised at the earliest opportunity and there has been a consequent failure of justice.
Q49Code of Civil Procedure, 1908
A suit relating to immovable property is decreed and later the same parties litigate a fresh suit on a matter that was a ground of defence which 'might and ought' to have been raised in the former suit but was not. The bar that operates is best described as:
aConstructive res judicata under Explanation IV to Section 11
bRes sub judice under Section 10
cEstoppel by record under Section 115 of the Evidence Act
dBar of limitation under Article 113
Answer: A
Explanation IV to Section 11 deems any matter which might and ought to have been made a ground of attack or defence in the former suit to have been directly and substantially in issue — the doctrine of constructive res judicata.
Q50Code of Civil Procedure, 1908
An interim injunction is granted ex parte. Under Order XXXIX Rule 3-A CPC, where an injunction has been granted without notice to the opposite party, the court shall make an endeavour to finally dispose of the application within:
aFourteen days from the date of grant
bThirty days from the date of grant
cSixty days from the date of grant
dNinety days from the date of grant
Answer: B
Order XXXIX Rule 3-A requires the court that grants an ex parte injunction to make an endeavour to finally dispose of the application within thirty days from the date of grant and record reasons for failure to do so.
Q51Code of Civil Procedure, 1908
A judgment-debtor's immovable property is sold in execution. He applies to set aside the sale on the ground of a material irregularity in publishing the sale. Under Order XXI Rule 90 CPC, the sale will be set aside only if the applicant further proves that:
aThe decree-holder himself purchased the property
bThe sale price was below the reserve price fixed by the court
cHe has sustained substantial injury by reason of such irregularity or fraud
dHe deposited the decretal amount before the date of sale
Answer: C
Order XXI Rule 90 permits setting aside a sale for material irregularity or fraud only where the applicant proves substantial injury sustained by reason of such irregularity or fraud.
Q52Code of Civil Procedure, 1908
In a suit, the plaintiff seeks to add a new defendant after the period of limitation against that defendant has expired. Generally, under Order I Rule 10 read with Section 21 of the Limitation Act, the suit against the newly added defendant is deemed to have been instituted:
aOn the date of the original plaint
bOn the date the summons was first issued in the suit
cOn the date the cause of action arose
dOn the date the new defendant was impleaded
Answer: D
Under Section 21 of the Limitation Act, where a new defendant is added, the suit is deemed instituted against him on the date of his being so made a party, unless the court directs otherwise on a finding of mistake in good faith.
Q53Law of Evidence — Bharatiya Sakshya Adhiniyam 2023 (use NEW code sections)
A is on trial for the murder of B. Evidence is led that, shortly before the killing, A and B had a violent quarrel. Under the Bharatiya Sakshya Adhiniyam, 2023, the relevance of this quarrel is most directly governed by which provision?
aSection 6 (motive, preparation and previous or subsequent conduct)
bSection 4 (facts forming part of the same transaction / res gestae)
cSection 9 (facts necessary to explain or introduce relevant facts)
dSection 14 (existence of state of mind)
Answer: A
Under Section 6 BSA 2023 (corresponding to old Section 8 IEA), facts showing motive, preparation and conduct are relevant; a prior quarrel evidences motive for the killing.
Q54Law of Evidence — Bharatiya Sakshya Adhiniyam 2023 (use NEW code sections)
Under the Bharatiya Sakshya Adhiniyam, 2023, a dying declaration as to the cause of death is admissible under Section 26(a). Which of the following is the correct legal position regarding such a statement?
aIt is admissible even if the declarant survives, so long as death was apprehended
bIt is admissible only if the declarant actually dies and the death is in issue
cIt is admissible regardless of whether the cause of death is in question in the proceeding
dIt must always be recorded by a Magistrate to be admissible
Answer: B
Section 26(a) BSA 2023 (old Section 32(1) IEA) requires that the person be dead and that the cause of his death be in question; if the declarant survives, the statement is not a dying declaration.
Q55Law of Evidence — Bharatiya Sakshya Adhiniyam 2023 (use NEW code sections)
A accused person, while in police custody, states: 'I will show the place where I buried the knife,' and consequently a knife is recovered. Under the Bharatiya Sakshya Adhiniyam, 2023, how much of this information is admissible?
aThe entire statement, including the words 'I buried'
bNothing, because all custodial statements are barred
cOnly so much of the information as distinctly relates to the fact thereby discovered
dThe whole confession, since recovery cures the bar
Answer: C
Section 23(2) BSA 2023 (old Section 27 IEA) admits only so much of the information as relates distinctly to the fact discovered; the incriminating phrase 'I buried' is inadmissible (Pulukuri Kottaya).
Q56Law of Evidence — Bharatiya Sakshya Adhiniyam 2023 (use NEW code sections)
Under the Bharatiya Sakshya Adhiniyam, 2023, where a person is shown to have been unheard of for seven years by those who would naturally have heard from him, and the question is whether he is alive, the burden of proving that he is alive lies on:
aThe prosecution in all cases
bNeither party; the court must presume death
cThe person who affirms his death
dThe person who affirms that he is alive
Answer: D
Under Sections 110 and 111 BSA 2023 (old Sections 107–108 IEA), once seven years' unexplained absence is shown, the burden of proving that the person is alive shifts to the party asserting that he is alive.
Q57Law of Evidence — Bharatiya Sakshya Adhiniyam 2023 (use NEW code sections)
Section 39(2) of the Bharatiya Sakshya Adhiniyam, 2023 deals with a specialised category of expert opinion. It provides that:
aWhere the Information Technology Act applies, the opinion of an Examiner of Electronic Evidence is relevant
bExpert opinion is admissible only if the expert appears in person
cHandwriting opinions are no longer admissible
dOpinions of foreign experts are inadmissible
Answer: A
Section 39(2) BSA 2023 (carrying forward old Section 45A IEA) makes relevant the opinion of the Examiner of Electronic Evidence referred to in Section 79A of the IT Act, 2000.
Q58Administrative Law
An order is passed by an authority that had no jurisdiction over the subject-matter but the affected party was given a full and fair hearing. On a writ challenge, the order is most likely to be held:
aValid, because the rules of natural justice were complied with
bVoid, because compliance with natural justice cannot cure a want of jurisdiction
cVoidable only, requiring the party to first exhaust statutory appeals
dValid, since jurisdictional defects are mere irregularities curable by consent
Answer: B
A decision rendered without jurisdiction is a nullity; observance of natural justice cannot validate an order the authority had no power to make (jurisdictional error renders the act void).
Q59Administrative Law
Which proposition correctly states the rule in A.K. Kraipak v. Union of India (1969) regarding natural justice?
aNatural justice applies only to judicial and quasi-judicial functions, never to administrative functions
bBias of a single member of a selection board never vitiates the selection
cThe distinction between quasi-judicial and administrative functions is largely thin, and natural justice can apply to administrative action affecting rights
dNatural justice is excluded wherever the statute is silent on hearing
Answer: C
In A.K. Kraipak the Supreme Court held the line between administrative and quasi-judicial functions is thin, and the rules of natural justice (including against bias) extend to administrative action affecting rights.
Q60Administrative Law
A licensing officer who is to decide a tender dispute is the brother-in-law of one of the competing bidders, though he claims he decided impartially. The decision is challenged. The applicable principle is:
aActual bias must be proved by the objector before relief can be granted
bPecuniary interest alone disqualifies; personal relationships are irrelevant
cThe decision stands unless the bidder consented to the officer's participation
dA real likelihood or reasonable apprehension of bias is sufficient to vitiate the decision
Answer: D
Under nemo judex in causa sua, a reasonable likelihood/apprehension of bias suffices; proof of actual bias is not required, as justice must also appear to be done.
Q61Administrative Law
The doctrine that a delegate cannot further delegate the power entrusted to it is expressed by the maxim:
aDelegatus non potest delegare
bAudi alteram partem
cRes ipsa loquitur
dVolenti non fit injuria
Answer: A
Delegatus non potest delegare means a delegate cannot sub-delegate unless the parent statute expressly or by necessary implication permits it.
Q62Administrative Law
In Maneka Gandhi v. Union of India (1978), the impounding of a passport without giving reasons was held defective primarily because:
aThe Passports Act did not authorise impounding at all
bThe principles of natural justice are implied even where the statute is silent, and the procedure must be just, fair and reasonable
cOnly the President could impound a passport
dNatural justice has no application to passport matters
Answer: B
Maneka Gandhi read audi alteram partem into the Passports Act and held that procedure depriving personal liberty under Article 21 must be just, fair and reasonable, not arbitrary.
Q63Jurisprudence, Interpretation of Statutes & legal maxims
A penal statute creates an offence but is silent on whether it applies to acts committed before its commencement. The accused contends it cannot govern his prior act. Which rule of interpretation, reinforced by Article 20(1) of the Constitution, supports the accused?
aThe mischief rule, requiring suppression of the mischief retrospectively
bThe rule of ejusdem generis
cThe presumption against retrospective operation of penal statutes
dThe doctrine of pith and substance
Answer: C
Penal statutes are presumed prospective; Article 20(1) bars conviction for an act not an offence when committed, codifying the presumption against retrospectivity. The mischief and ejusdem generis rules are inapplicable here.
Q64Jurisprudence, Interpretation of Statutes & legal maxims
A statute lists 'cats, dogs, cows, buffaloes and other animals' as requiring a licence. Applying ejusdem generis, which animal is MOST likely covered by 'other animals'?
aA snake kept in a private terrarium
bA honeybee colony
cA jellyfish in an aquarium
dA goat kept as livestock
Answer: D
Ejusdem generis confines general words to the genus of the specific words preceding them; the named species are domesticated mammals/livestock, so a goat fits the genus while a snake, bee or jellyfish do not.
Q65Jurisprudence, Interpretation of Statutes & legal maxims
The Heydon's case (1584) 'mischief rule' directs the court to consider four things. Which of the following is NOT one of the four considerations under that rule?
aWhat penalty best deters future offenders
bWhat was the common law before the Act
cWhat was the mischief and defect for which the common law did not provide
dWhat remedy Parliament has resolved to cure the mischief
Answer: A
Heydon's case lists: the prior law, the mischief/defect, the remedy appointed, and the true reason of the remedy. Choosing a deterrent penalty is not among the four points.
Q66Jurisprudence, Interpretation of Statutes & legal maxims
Section 6 of the General Clauses Act, 1897 deals with the effect of repeal. Where a statute is repealed and re-enacted, which consequence does Section 6 generally save in the absence of a contrary intention?
aOnly future rights, not accrued liabilities
bPending proceedings, rights and liabilities accrued under the repealed law
cNothing, since repeal wipes the statute out as if it never existed
dOnly the procedural provisions of the repealed Act
Answer: B
Section 6 of the General Clauses Act preserves accrued rights, obligations, liabilities and pending legal proceedings despite repeal, unless a different intention appears. Repeal does not obliterate vested rights.
Q67Transfer of Property Act, 1882
A executes a sale deed transferring his house to B but does not register it; B takes possession, pays the full price and makes lasting improvements. A later sues to recover possession. B's best defence is:
aThat an unregistered sale deed of immovable property worth over Rs. 100 still validly passes title to B
bThe doctrine of feeding the grant by estoppel under Section 43
cThe doctrine of part performance under Section 53A, which bars the transferor from enforcing rights inconsistent with the contract though it confers no title on the transferee
dThe rule against perpetuities under Section 14
Answer: C
Section 53A allows a transferee in possession under a written contract who has performed his part to defend his possession, even though the transfer is not completed in the manner required by law; it is a shield, not a sword, and confers no title.
Q68Transfer of Property Act, 1882
A, professing to transfer Greenacre to B for value, has no title at the time of transfer. A subsequently acquires title to Greenacre. The contract of transfer between A and B is still subsisting. The result is:
aB acquires nothing because A had no title when the transfer was made
bTitle automatically vests in B the moment A acquires it, regardless of B's wishes
cA must re-execute a fresh deed for the transfer to take effect
dAt B's option the transfer operates on the after-acquired interest, by the doctrine of feeding the grant by estoppel under Section 43
Answer: D
Section 43 (feeding the grant by estoppel) provides that where a person fraudulently or erroneously represents that he is authorised to transfer property and does so for consideration, the transfer shall, at the option of the transferee, operate on any interest the transferor later acquires while the contract subsists.
Q69Arbitration and Conciliation Act, 1996
An application under Section 8 of the Act, requiring a judicial authority to refer the parties to arbitration, must ordinarily be made not later than which of the following stages?
aBefore or at the time of submitting the first statement on the substance of the dispute
bBefore the institution of the suit
cAny time before the framing of issues
dBefore pronouncement of judgment
Answer: A
Section 8(1) requires the party to apply not later than the date of submitting its first statement on the substance of the dispute; a later application is barred as the party is deemed to have waived the arbitration agreement.
Q70Arbitration and Conciliation Act, 1996
In SBP & Co. v. Patel Engineering Ltd. (2005), the Supreme Court held that the power of the Chief Justice (or his designate) under Section 11(6) to appoint an arbitrator is:
aA purely administrative function not amenable to appeal
bA judicial power involving determination of certain preliminary issues
cA ministerial act delegable only to a District Judge
dA legislative function exempt from review
Answer: B
In SBP & Co. v. Patel Engineering Ltd. (2005), a seven-judge bench held the Section 11(6) power is judicial, not administrative, allowing the Chief Justice to decide preliminary issues such as existence of the arbitration agreement.
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