CA Foundation Law paper May 2025 with answers
Looking for solutions to the CA Foundation Law Paper May 2025 with Answers? You’re in the right place! This blog covers everything you need to know about the CA Foundation May 2025 Exam, including detailed solutions and insights to help you excel. We’re here to provide a comprehensive breakdown of the May 2025 Law Paper
Table of Contents
CA Foundation Jan 25 Suggested Answer Other Subjects Blogs :
ABC Infrastructure Ltd. was running business successfully from several years. P was the purchase manager of company. He authorised his agent Q to buy Raw Material on his behalf for construction of Roads in Delhi. He instructed Q to buy only Mazboot Brand of Cement @ ₹2,000–2,500 per ton to maintain quality of Roads in Delhi. However, Q bought 1,000 tons of Mazboot Brand of cement from Mr. R a very well-known vendor of ABC Infrastructure Ltd. @ ₹3,500/- per ton. Mr. Q has not disclosed the fact to R that he was buying cement for ABC Infrastructure Ltd. When P discovered this aspect, he refused to pay Mr. R and rejects the cement bought by Q on the ground that Q has exceeded the authority. Mr. R suffered a huge loss on account of this transaction. Give your opinion in accordance with provisions from the Indian Contract Act, 1872:
(i) Whether P was bound to pay Mr. R for cement purchased by his agent Mr. Q?
(ii) On the other hand, Q being agent refused to accept any liability to compensate R. In this situation, Whether Mr. R can file a suit against Q?
State with reasons whether the following companies can be treated as Small Companies with reference to the provisions of The Companies Act, 2013:
STS Pvt. Ltd., having a turnover of ₹10 crores and the paid-up capital of ₹1 crore (1,00,000 equity shares of ₹100 each). Out of these 60,000 equity shares are held by UV Infratech Pvt. Ltd.
ZX Ltd., having a paid-up capital of ₹3 crores and turnover of ₹35 crores.
The paid-up equity share capital of ACD Ltd. is ₹80 crores & preference share capital of ₹20 crores. B Ltd. holds equity shares in ACD Ltd. worth ₹15 crores and preference shares worth ₹10 crores.
Can B Ltd. be considered as an Associate Company of ACD Ltd.?
In accordance with provisions of The Indian Partnership Act, 1932, explain the following:
S purchased a dress from a reputed showroom and made the payment in cash. The dress she purchased required some alteration. The shopkeeper assured S that it would take just one day to get the dress altered. It was agreed that once the dress was altered, the shopkeeper would inform S through phone and she would collect the dress. Next day, by evening, the dress was altered and kept ready to be delivered to S. The shopkeeper, however, forgot to inform S that the dress was ready.
In the meantime, a short circuit occurred near the delivery counter of the shop and some packets ready for delivery caught fire. After waiting for 10 days, when S went to collect her dress, she was informed that she came late and her dress was burnt in the fire. S then asked for a refund of the money that she paid. The shopkeeper refused, by saying that the dress was kept ready the very next day of purchase and the loss due to fire occurred after a week. He refused to bear the liability by saying that if S had collected the dress on time it would not have been burnt.
S insisted that she was waiting for a call from the shop and thus, entitled to claim the refund of cost of dress.
Examine, with reference to the provisions of the Sale of Goods Act, 1930, whether shopkeeper will be liable to refund the cost of dress to S?
Doctrine of indoor management allows all those who deal with the company to assume that the officers of the company have observed the provisions of the articles. In light of the above statement, explain the doctrine of indoor management and its exceptions, if any, according to provisions of The Companies Act, 2013.
Limited Liability Partnership (LLP) gives the benefits of Limited Liability of a company on one hand and the flexibility of Partnership on the other. Discuss according to provisions of The Limited Liability Partnership Act, 2008.
Raju and his friend Anil have approached you to help them to form a LLP. The object of the proposed LLP is to run a charitable school which provides free education to the poor children. What would be your suggestion in accordance with provisions of The Limited Liability Partnership Act, 2008?
ABC & Co is a renowned partnership firm doing business in textile industry from last twenty years. But due to technical up-gradation, firm incurred heavy debts of ₹50 lakhs. To maintain the integrity of the firm they introduced Mr. D, as a new partner. Before admission of D, other partners A, B, and C decided on their own and made an agreement with the creditors that the new partner will be liable for existing debt through novation. When D joins, he came to know about the debt of ₹50 lakhs. With reference to the provisions of The Indian Partnership Act, 1932, give your opinion:
(i) Whether D would be liable for the debts of the firm incurred prior to his admission by virtue of the agreement between A, B, C, and the creditors?
(ii) Whether your answer will be different if D was minor at the time of admission?
(iii) Whether D would be liable to pay the debt upon becoming major?
The Object clause of Memorandum of Association of ABC Pvt. Ltd. authorized the company to carry on the business of trading in property in Gurgaon. Since the company was not doing well, the Directors of the company in a recent board meeting planned to diversify the business and enter into Construction business. For this purpose, they borrowed a sum of ₹5 crores from Magnum Finance Ltd. But the members of the company did not approve the decision of the board hence, company refused to repay the loan. According to provisions of The Companies Act, 2013 what is the recourse available to Magnum Finance Ltd. for recovery of the loan?
SNM Ltd. was registered in 2021 with a share capital of ₹50 Lakh divided into 5 lakhs equity shares of ₹10 each under Section 8 of the Companies Act, 2013 for promotion of art in Jaipur. Company earned huge profits during the financial year ending on 31st March 2025 due to boom in the market. On 10th May 2025, 75% members of the company demanded to distribute 10% dividend to the equity shareholders. For this purpose, they passed special resolution in EGM.
With reference to provisions of The Companies Act, 2013 decide whether SNM Ltd. can declare dividend @ 10% to equity shareholders for the year ending 31st March 2025.
According to provisions of The Indian Contract Act, 1872, define the following terms with reference to contract of guarantee:
(i) Nature and extent of Surety’s Liability
(ii) Discharge of a Contract of Surety by Invalidation of the Contract of Guarantee
X was running a business of Car on lease. One fine day, Y came to hire a car for 10 days for his business tour from Delhi to Amritsar. X offered him a Honda City for ₹50,000/- for 10 days on a condition that petrol and toll expenses will be borne by him. During the journey, engine of car was choked. Y has to spend ₹10,000/- for repair of engine. When he was coming back from Amritsar, brakes of car were not working and a major accident of Y happened due to this. Y was admitted to hospital and paid a bill of ₹50,000 on recovery. Y asked X to compensate him charges for car repair and hospital expenses amounting ₹60,000/-. X denied for compensation by saying that he was not aware about the engine and brakes fault. Y filed a suit against X for recovery of damages. Give your opinion with reference to provisions of The Indian Contract Act, 1872:
(i) Whether Y can withhold the amount of hire charges ₹50,000/- on account of non-payment of damages?
(ii) Whether Mr. X was liable to pay damage as he was not aware of the fact of faults in car?
“Delivery of an instrument is essential whether instrument is payable to bearer or order for effecting the negotiation.” Discuss this statement with reference to provisions of The Negotiable Instruments Act, 1881.
Differentiate between a promissory note and bill of exchange.
Explain in brief the important functions played by the Ministry of Finance, the Ministry of Corporate Affairs, and the Ministry of Law and Justice in enforcing the law in India.
P sold certain antique items to Q for ₹3,00,000/- on 13.12.2024. As per the terms of agreement 75% of the amount was to be paid within a week and the balance 25% was to be paid till 31.12.2024. Q appointed his agent R to take delivery of the goods after payment of first installment. Q transferred a sum of ₹2,80,000/- in the account of P through NEFT on 18.12.2024 which was credited in P’s account on the same date. R failed to take delivery of antique items due to medical emergency.
By the meantime, Q failed to make payment of the second installment till 31.12.2024. On 10.01.2025, Q’s agent came to take the delivery of goods. But, P refused to deliver the goods and exercised his right of lien over the goods.
According to provisions of The Sale of Goods Act, 1930, give your opinion whether P was justified in exercising right of lien as only ₹20,000/- was left to be paid?
An auction takes place in Delhi for antique items. It is notified to the bidders that the sale will be completed, only when the hammer of the auctioneer hits the table and he announces “you are the highest bidder”. During the auction, L bids for an antique sculpture, worth ₹8 lakhs. The hammer falls, but announcement cannot be made as the auction suddenly stops before the auctioneer can utter any words. It is notified to everyone that there has been an unexpected rise in the market price for that particular sculpture, and therefore, it will not be sold on that particular day. L contends that the auctioneer is bound to sell the sculpture to him at the price he bid because once he bid at the highest price in the auction and the hammer fell, the auction sale was completed and therefore, the auctioneer is under a contractual obligation to sell the sculpture. The auctioneer disagrees.
Discuss the validity of L’s claim in reference to the provisions of The Sale of Goods Act, 1930.
“The partner indeed virtually embraces the character of both a principal and an agent. The implied authority of a partner to bind the firm by all acts done by him in all matters connected with business is done in the usual way, not beyond the nature and scope of Partnership.” Explain with reference to provisions of The Indian Partnership Act, 1932.
Give your opinion with reference to provisions of The Indian Contract Act, 1872:
Whether joint promisor and promisee voluntarily discharge their obligation even after death?
In case they won’t be able to discharge their obligation, whether any of the joint promisor may be compelled?
What would be the situation in case of default by any one of them?
What are the effects of Coercion? “Whether Threat to commit suicide is coercion”? Elaborate with reference to provisions of The Indian Contract Act, 1872.
Ram purchased a second-hand car from his friend Rohan for ₹5 lakhs on 10th November, 2022. He paid ₹4 lakh immediately and promised to pay ₹1 lakh within a year. But, he could not pay the remaining amount till December 2023. On 5th January, 2024 Ram received an invitation for Rohan’s wedding which he could not attend but sent a cheque of ₹51,000 as gift by post.
When Rohan deposited the cheque, it was returned unpaid due to insufficient balance in the account of Ram. Rohan considered it as an offence under Section 138 of The Negotiable Instruments Act, 1881.
Advise:
(i) Whether Ram would be held liable for dishonour of cheque?
(ii) Whether Rohan was justified in considering this as an offence under Section 138 of the Negotiable Instruments Act, 1881?
With reference to provisions of The Indian Contract Act, 1872, define the following terms:
(i) Quasi-contracts and its salient features
(ii) Responsibility of finder of goods
Explain the following terms with reference to The Indian Contract Act, 1872:
(i) Pledge by mercantile agent
(ii) Pledge by person in possession under voidable contract
With reference to provisions of The Sale of Goods Act, 1930, answer the following:
(i) What do you mean by Reservation of right of disposal? State the circumstances under which right of disposal may be reserved.
(ii) Sometimes, breach of condition will be treated as breach of warranty as a result of which the buyer loses his right to rescind.
State the circumstance where a contract cannot be avoided even on account of breach of condition.
Ruchika Saboo
An All India Ranker (AIR 7 - CA Finals, AIR 43 - CA Inter), she is one of those teachers who just loved studying as a student. Aims to bring the same drive in her students.
Ruchika Ma'am has been a meritorious student throughout her student life. She is one of those who did not study from exam point of view or out of fear but because of the fact that she JUST LOVED STUDYING. When she says - love what you study, it has a deeper meaning.
She believes - "When you study, you get wise, you obtain knowledge. A knowledge that helps you in real life, in solving problems, finding opportunities. Implement what you study". She has a huge affinity for the Law Subject in particular and always encourages student to - "STUDY FROM THE BARE ACT, MAKE YOUR OWN INTERPRETATIONS". A rare practice that you will find in her video lectures as well.
She specializes in theory subjects - Law and Auditing.
Yashvardhan Saboo
A Story teller, passionate for simplifying complexities, techie. Perfectionist by heart, he is the founder of - Konceptca.
Yash Sir (As students call him fondly) is not a teacher per se. He is a story teller who specializes in simplifying things, connecting the dots and building a story behind everything he teaches. A firm believer of Real Teaching, according to him - "Real Teaching is not teaching standard methods but giving the power to students to develop his own methods".
He cleared his CA Finals in May 2011 and has been into teaching since. He started teaching CA, CS, 11th, 12th, B.Com, M.Com students in an offline mode until 2016 when Konceptca was launched. One of the pioneers in Online Education, he believes in providing a learning experience which is NEAT, SMOOTH and AFFORDABLE.
He specializes in practical subjects – Accounting, Costing, Taxation, Financial Management. With over 12 years of teaching experience (Online as well as Offline), he SURELY KNOWS IT ALL.
"Koncept perfectly justifies what it sounds, i.e, your concepts are meant to be cleared if you are a Konceptian. My experience with Koncept was amazing. The most striking experience that I went through was the the way Yash sir and Ruchika ma'am taught us in the lectures, making it very interesting and lucid. Another great feature of Koncept is that you get mentor calls which I think drives you to stay motivated and be disciplined. And of course it goes without saying that Yash sir has always been like a friend to me, giving me genuine guidance whenever I was in need. So once again I want to thank Koncept Education for all their efforts."
"Hello everyone, I am Kaushik Prajapati. I recently passed my CA Foundation Dec 23 exam in first attempt, That's possible only of proper guidance given by Yash sir and Ruchika ma'am. Koncept App provide me a video lectures, Notes and best thing about it is question bank. It contains PYP, RTP, MTP with soloution that help me easily score better marks in my exam. I really appericiate to Koncept team and I thankful to Koncept team."
"Hi. My name is Arka Das. I have cleared my CMA Foundation Exam. I cleared my 12th Board Exam from Bengali Medium and I had a very big language problem. Koncept Education has helped me a lot to overcome my language barrier. Their live sessions are really helpful. They have cleared my basic concepts. I think its a phenomenal app."
"I cleared my foundation examination in very first attempt with good marks in practical subject as well as theoretical subject this can be possible only because of koncept Education and the guidance that Yash sir has provide me, Thank you."
