Mr. L let out his residential house to Mr. M for 50,000 p.m. for a period of one year. According to the Rent agreement, electricity bill will be…
CA Foundation · Business Laws · MTP · January 2025
Mr. L let out his residential house to Mr. M for 50,000 p.m. for a period of one year. According to the Rent agreement, electricity bill will be paid by Mr. L. But Mr. L could not pay electricity dues up to 5 months, due to his financial hardships. The Electricity Board sent the notice of disconnection, if it is not paid within a week's time. To avoid all this, Mr. M paid the electricity bill of 50,000 with penalty. Later on, L refused to reimburse - 50,000 and argued that he has paid bill voluntarily because of his own interest. Decide with reference to provisions of the Indian Contract Act, 1872 whether Mr. M is entitled to be reimbursed by Mr. L?
Suggested Answer and Working Notes:
(i) According to Section 455 of the Companies Act, 2013, where a company is formed and registered under this Act for a future project or to hold an asset or intellectual property and has no significant accounting transaction, such a company or an inactive company may make an application to the Registrar in such manner as may be prescribed for obtaining the status of a dormant company. In the instant case, XYZ Ltd. has made a significant accounting transaction (down payment of 1crore for plant and machinery), it does not meet the criteria of a dormant company under Section 455 of the Companies Act, 2013. Therefore, XYZ Ltd. cannot acquire the status of dormant company. (ii) Foreign Company [Section 2 (42) of the Companies Act, 2013]: It means any company or body corporate incorporated outside India which— (i) has a place of business in India whether by itself or through an agent, physically or through electronic mode; and (ii) conducts any business activity in India in any other manner. As Mike LLC is incorporated in Singapore and having a place of business in Pune, India, it is a foreign Company.
Topics: The Indian Contract Act, 1872, The Indian Contract Act, 1872, The Indian Contract Act, 1872
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