Mid Term Examination, September- 2016 B.A.LL.B. (HONS.) SEMESTER VII IX CLS-CORPORATE REGULATION (Hons.-II) Max. Marks: 20 Max. Time: 1:30 Hrs. Note: Answer any TWO questions out of three. All questions carry equal marks.

1. Lakhan and Ram executed a contract according to which Ram will sell rice to Lakhan after one month at the rate of 150 rupees per kilogram. Because rice price usually fluctuates a lot, Ram thought that it would be beneficial to enter into a favoured contract; so in that contract Ram reserved the right of putting an end to the transaction to himself. What kind of instrument is this? Forward Market Commission was regulating such kinds of instrument or not? Also discuss the reason of merger of FMC and SEBI. Do you think it was the correct decision? Is SEBI equipped to be the regulator of commodity market? (Marks 10)

2. PAIN Ltd. a company registered under Section 25 of the Companies Act 1956, with net worth of 90 Lakhs and main objective to function as Self Regulatory Organisation, filed an application to SEBI to be registered as SRO. Will they be granted registration? Can Stock Exchange be registered as SRO in India? Is appointment of Self Regulatory Organisation a beneficial deal in current Indian Financial System? Explain. How is Reserve Bank of India trying to control volume of credit quantitatively in financial system? (Marks

3. Government and Business Organisations are inter-related and inter-dependent to one another? Do you agree with the statement? Give reason for your answer. A complaint was filed against a Merchant Banker "Avid Bank" to SEBI by an investor regarding the unfair practices done by Avid Bank during an IPO of XYZ Ltd. SEBI initiated an investigation against Avid Bank and XYZ Ltd. During the proceeding they called for certain record, performed search and seizure on their own and then after investigation, hearing they found Avid bank and XYZ Ltd. guilty and imposed fines on them. Avid Bank challenged the entire proceeding stating SEBI performed certain ultra-vires acts also. Do you agree with the allegations? Support your answer with legal reasoning. Is SEBI a quasi-legislative body? If yes, then mention the provisions from where you can deduce the quasi-legislative function of SEBI. (Marks 10)