MCQs on JUDICIAL PRONOUNCEMENTS

Q.1:- In the matter of Hindustan Lever Employee's Union (Supra) (1995) Supp 0) SCC 499, Supreme Court dealt with the following issue of:

• Discussed the problem of valuation in the case of amalgamation of two com panies
• What method should be adopted for arriving at a proper exchange ratio
• None of the above
• Both a and b

Q.2:- Principles for Company Law' mentions four factors ((1) Capital Cover, (2) Yield, (3) Earning Capacity, and (4) Marketability ) which had to be kept in mind in the valuation on shares , observed as follows is in the matter of

• Brooke Bond Lipton Case
• Renuka Datla Vs. Solvay Phramaceutical
• Hindustan Level Case
• Miheer H. Mafatlal Vs. Mafatlal Industries.....

Q.3:- In respect of projections, the valuer has chosen best possible method by capitalizing past earnings and also considering maintainable profits held in the matter of

• MIHEER H. MAFATLAL V. MAFATLAL INDUSTRIES LTD. (1997) (SC)
• HINDUSTAN LEVER EMPLOYEES UNION V. HINDUSTAN LEVER LTD AND OTHERS (1995) (SC)
• DR. MRS. RENUKA DATLA V. SOLVAY PHARMACEUTICALS B.V. & ORS. (2003)
• G.L. SULTANIA AND ANOTHER V. SEBI AND OTHERS (2007)

Q.4:- In which case, the bone of contention was mutual settlement with foreign investor

• Hindustan Level Case
• RenukaDatla Vs. Solvay Phramaceutical
• Brooke Bond Lipton Case
• Miheer H. Mafatlal Vs. Mafatlal Industries.....

Q.5:- In GL SultaniaVs. SEBI, What was the verdict of Supreme Court in relation to failure of SEBI appellate tribunal to perform its duties?

• SAT was biased towards SEBI
• SAT has wrongly appointed a new valuer
• SAT has failed to use its powers
• SAT has acted in judicious manner

Q.6:- In RenukaDatlaVs. Solvay Pharmaceuticals one of the reason to ignore the discounted cash flow method by the valuer.

• Both parties provided similar financial projections
• Financial projections provided by both the parties differed substantially
• He did not ignore Discounted cash flow method
• He was directed by Court to consider Discounted cash flow method

Q.7:- In Dinesh Vrajlal Lakhani Vs. Parke Davis Case, what was the verdict on the issue of The Court is neither a valuer nor an appellate forum to re-appreciate the merits of the valuation in matter of merger and also ensure

• Principle of head count cannot be ignored and One person shall not allowed to vote more than once
• Court said determination should not be contrary to law or unfair to the shareholders of the company which has been merged.
• The Court accept the the valuation report subject to cross verification of analysis
• The Court said no separate valuation of brands is required and said that it is part of goodwill The

Q.8:- In the case of Hindustan Lever Employee's Union (Supra). (1995) Supp (1) SCC 499, the Supreme Court accepted the ratio of as income, market and asset approach on which the valuation was based:

• 2:2:1 .
• 1:1:1
• 2:1:2
• 1:2:2

Q.9:- In the matter of Hindustan Lever Employee's Union (Supra) (1995) Supp (1) SCC 499, the Supreme Court mentioned that how many factors will have to be taken into account determining the final share exchange ratio:

• 8
• 4
• 6
• 9

Q.10:- In the matter of Hindustan Lever Employee's Union (Supra) (1995) Supp 0) SCC 499, Supreme Court dealt with the following issue of:

• Since 75% of the shareholders who are the best judges of their interest and are better conversant with swap ratio market trend agreed to the valuation determined, the court declined tointerfere with the same
• Since 90% of the shareholders who are the best judges of their interest and are better conversant with market trend agreed to the valuation determined, the court declined tointerfere with the same
• Since 80% of the shareholders who are the best judges of their interest and are better conversant with exchange ratios on market trend agreed to the valuation determined, the court declined tointerfere with the same
• Since 95% of the shareholders who are the best judges of their interest and are better conversant with market trend agreed to the valuation determined, the court declined to interfere with the same

Q.11:- In the matter of Hindustan Lever Employee's Union (Supra) (1995) Supp (1) SCC 499, which of two company have been merged

• Tata chemical Mills Co. Ltd. ("TCOMCO") was merged into Hindustan Lever Ltd. ("HLL"), a subsidiary of Unilever ("UL"),
• Tata chemical Co. Ltd. ("TCMCO") was merged into Hindustan Lever Ltd. ("HLL"), a subsidiary of Unilever ("UL"),
• Tata Oil Mills Co. Ltd. ("TOMCO") was merged into Hindustan Lever Ltd. ("HLL"), a subsidiary of Unilever ("UL"),
• Tata Mills Co. Ltd. ("TMCO") was merged into Hindustan Lever Ltd. ("HLL"), a subsidiary of Unilever ("UL"),

Q.12:- The Supreme Court in Miheer H. Mafatlal vs. Mafatlal Industries Ltd. (1997) 1 SCC For arriving at the fair value of share, three well known methods are applied

• Asset base, earning based, market based.
• The net worth method; the market value method; the earnings method.
• DCF; Asset base; market based.
• Manageable profit basis method (the Earning per Share Method); Net worth method or the break value method; Market value method.

Q.13:- Which of the following method of fair exchange ratio Is acceptable to court in view of Supreme Court decision in Miheer H. Mallnlal vs. Malatlal Industries Ltd. (1997).l SCC 579:

• Net worth Method
• Market value Method
• Manageable Profit Method
• All of the above

Q.14:- In the matter of Dinesh Vrajlal Lakhani vs. Parke Davis India Ltd the Division Bench of the Bombay High Court held that:

• The Court will for instance interfere only because the valuation adopted by the valuer may have been improved upon had another method been adopted
• The Court will not for instance interfere only because the valuation adopted by the client may have been improved upon had another method been adopted
• The Court will not for instance interfere only because the valuation adopted by the valuer may have been improved upon had another method been adopted
• None of the above

Q.15:- In Dinesh Vrajlal Lakhani Vs. Parke Davis matter, In court convened meeting, the scheme of amalgamation was approved by ....of shareholders

• More than 92.5%
• More than 95 %
• More than 90%
• More than 99%

Q.16:- If the valuer applied the standard method of valuation, considered the matter from all appropriate angles without taking into account any irrelevant material or eschewing from consideration of any relevant material, his valuation could not be challenged on the ground of its being vitiated by fundamental error

• DINESH VRAJLAL LAKHANI V. PARKE DAVIS (INDIA) LTD. (2005)
• DR. MRS. RENUKA DATLA V. SOLVAY PHARMACEUTICALS B.V. & ORS. (2003)
• BROOKE BOND LIPTON INDIA LTD(1999) (98 COMP CAS 496) (CAL.)
• HINDUSTAN LEVER EMPLOYEES UNION V. HINDUSTAN LEVER LTD AND OTHERS (1995) (SC)

Q.17:- In view of the decision of the Supreme Court in the case of Dr. Mrs. Renuka Datla vs solvay pharmaceutical B.V, & Ors, the value of a company /business would be more influenced by its:

• Market value
• Earning value
• Asset value
• All of the above

Q.18:- In GL Sultania Vs. SEBI matter. What was public shareholding at the time of take over.

• Between 1% and 25%
• Around 90%
• Not more than 1%
• More than 25 % but less than 50%

Q.19:- We are satisfied that the valuer, Patni & Company have not committed any such error which may justify our interference. They have considered all the factors relevant and have adopted a reasonable approach which does not call for interference by us.

• Dinesh Vrajlal.... Vs Parke Davis
• GL Sultania Vs. SEBI
• Miheer H. Mafatlal Vs. Mafatlal Industries.....
• Renuka Datla ....Vs. Solvay Phramaceutical

Q.20:- In Dinesh Vrajlal Lakhani Vs. Parke Davis matter, in reference to counting of votes what was the verdict

• One person shall not allowed to vote more than once
• Scrutineer has not performed any illegality in counting of votes
• Principle of head count cannot be ignored
• Show of hands should be used

Q.21:- In Brooke Bond Lipton Case, what was the verdict on the issue of non consideration of value of brands separately in matter of merger

• The Court said no separate valuation of brands is required and said that it is part of goodwill
• The Court appointed another valuer
• The Court asked the valuer to revise valuation report
• The Court rejected the valuation report

Q.22:- In which matter, the issue of landlord tenancies was addressed by the Court

• Hindustan Level Case
• Brooke Bond Lipton Case
• Miheer H. Mafatlal Vs. Mafatlal Industries.....
• RenukaDatla Vs. Solvay Phramaceutical

Q.23:- Çoncept of commercial wisdom’ was propounded in which matter

• Brooke Bond Lipton Case
• RenukaDatla Vs. Solvay Phramaceutical
• Hindustan Level Case
• Miheer H. Mafatlal Vs. Mafatlal Industries.....

Q.24:- What is the zest of the Supreme Court decision in the case of Hindustan Lever Employee's Union (Supra) (1995) Supp (1) SCC 499:

• A company court does not exercises an appellate jurisdiction founded on fairness
• The Jurisdiction of the court in sanctioning a claim of merger is not to ascertain mathematical accuracy if the determination satisfied the arithmetical test
• None of the above
• Both a and b

Q.25:- In the matter of Hindustan Lever Employee's Union (Supra) (1995) Supp 0) SCC 499, Supreme Court dealt In case of amalgamation, a combination of all or some of the methods of valuation may be adopted for the purpose of fixation of the exchange ratio of the shares of the two companies and with the following verdict of:

• Net assets may be given relatively lower weight while arriving at a weighted average
• Net assets may be given relatively high weight while arriving at a weighted average
• Net assets may be given relatively 1.5 time weight while arriving at a weighted average
• Net assets may be given relatively equal weight while arriving at a weighted average

Q.26:- The Supreme Court in Mihir Mafatlal's case, while dealing with an issue that the share exchange ratio was unfair and unreasonable, observed as follows:

• It must it-once be stated that valuation of shares is a technical and norma! problem which can he appropriately left to the consideration of experts in the field of accountancy
• It must at once be stated that valuation of shares is a technical and complex problem which can he appropriately left to the consideration of experts in the field of accountancy
• It must at once be stated that valuation of shares is a normal and complex problem which can he appropriately left to the consideration of experts in the field of accountancy
• None of the above

Q.27:- In RenukaDatla Vs. Solvay Pharmaceuticals what was the stand of valuer in reference to Control Premium

• He did not consider control premium
• He added control premium but Court rejected it
• He added Control Premium
• None of the above

Q.28:- Court has to ensure that the determination should not be contrary to law or unfair to the shareholders of the company which has been merged. Moreover Court will not interfere only because the valuation adopted by the valuer may have been improved upon had another method been adopted, Held in the matter of

• BROOKE BOND LIPTON INDIA LTD(1999) (98 COMP CAS 496) (CAL.)
• DINESH VRAJLAL LAKHANI V. PARKE DAVIS (INDIA) LTD. (2005)
• HINDUSTAN LEVER EMPLOYEES UNION V. HINDUSTAN LEVER LTD AND OTHERS (1995) (SC)
• MIHEER H. MAFATLAL V. MAFATLAL INDUSTRIES LTD. (1997) (SC)

Q.29:- In which of the judicial decision Supreme Court followed principle laid down in the case of Mrs. RenukaOatla vs. solvay pharmaceutical B.V. &Ors:

• Sukhadia v. Alembic Chemical Works Co. Ltd. (1987
• Sultania and Another vs. SEBI
• Duncans Industries Ltd vs State of U.P. &Ors civil appeal NO. 5929 of 1997) Jitendra R.
• All of the above

Q.30:- In the matter of Hindustan Lever Employee's Union (Supra) (1995) Supp (1) SCC 499, the Supreme Court mentioned that which of the following factors will have to be taken into account in determining the final share exchange ratio:

• The dividends presently paid on the shares of the two companies. It is often difficult to induce a shareholder, particularly an institution, to agree to a merger or a share-for-share bid if it involves a reduction in his dividend income.
• The relative growth prospects of the two companies
• The Stock Exchange prices of the shares of the two companies before the commencement of negotiations or the announcement of the bid
• All of the above

Q.31:- In the matter of Hindustan Lever Employee's Union (Supra) (1995) Supp (1) SCC 499, the Supreme Court mentioned that "this problem of valuation in the case of amalgamation of two Companies has been dealt with by Weinberg and Blank in the book

• Amalgamation and Acquisition
• Take-overs and Mergers
• Merger and Amalgamation
• Valuation

Q.32:- In which case the concept of “Valuation of shares is a technical and complex problem which shall be left to the experts....”was propounded

• Hindustan Level Case
• Renuka Datla ....Vs. Solvay Phramaceutical
• Dinesh Vrajlal.... Vs Parke Davis
• Miheer H. Mafatlal Vs. Mafatlal Industries.....

Q.33:- What is the zest' of the Supreme Court decision in Miheer Fl. Mafatlal vs. Mafatlal Industries td. (1997) 1SCC1579:.

• Court Neill for instance interfere only because the valuation adopted by the valuer may have been improved upon had another method been adopted
• In a scheme of amalgamation of two .companies, it is not necessary in law to call for a meeting, of the creditors and obtain their views on the scheme
• In general parlance when the valuation has been worked out by a recognized firm of chartered accountants who are experts in their field of valuation, it is not for the court to substitute the exchange ratio
• None of the above

Q.34:- In RenukaDatla Vs. Solvay Pharmaceuticals, Who was the valuer

• Mr TR Chadha
• Price Waterhouse
• Mr. Malegam
• Mr Patni

Q.35:- A mere allegation of fraud is not enough, it must be a proper charge of fraud with full particulars. in absence of any charge of fraud against them, court will accept such valuation and ratio of exchange. Held in the matter of

• BROOKE BOND LIPTON INDIA LTD(1999) (98 COMP CAS 496) (CAL.)
• MIHEER H. MAFATLAL V. MAFATLAL INDUSTRIES LTD. (1997) (SC)
• HINDUSTAN LEVER EMPLOYEES UNION V. HINDUSTAN LEVER LTD AND OTHERS (1995) (SC)
• G.L. SULTANIA AND ANOTHER V. SEBI AND OTHERS (2007)

Q.36:- In the matter G.L. SULTANIA AND ANOTHER V. SEBI AND OTHERS (2007) (SC) court cannot interfere with the valuation of an expert and valuation of shares and the principles laid down by Hindustan case did not apply to the facts of the case

• Unless it is shown to the court that some well accepted principles of valuation has been departed from without any reason,
• Valuation was not made on a fundamentally erroneous basis or a fundamental error is not going to the root of the matter
• The valuer adopted a demonstrably right approach
• Approach, adopted is not patently erroneous or that relevant factors have not been considered by the valuer

Q.37:- In GL Sultania Vs. SEBI, Who was appointed as Valuer by SEBI

• TR Chadha & Company
• Patni & Company
• Deloitte, Huskin and Sells
• Anand K Associates