BUSINESS LAWS QUESTION BANK CHAPTER: 1
Chapter: 1 – Indian Regulatory Framework
Question Bank (Updated till Jan2025 Attempt)
CA NIKESH AGRAWAL 2
,BUSINESS LAWS QUESTION BANK CHAPTER: 1
06 – Explain the types of laws in the Indian Legal System considering the Indian Regulatory
Framework? 4)c)6m,MDTP1,5,7,10, 4(c)6m,Sept2024, 4)c)6m,MTP1,June2024
Ans - The laws in the Indian legal system could be broadly classified as follows:
Criminal Law: Criminal law is concerned with laws pertaining to violations of the rule of law or
public wrongs and punishment of the same. Criminal Law is governed under the Indian Penal Code,
1860, and the Code of Criminal Procedure, 1973 (Crpc). The Indian Penal Code, 1860, defines the
crime, its nature, and punishments whereas the Criminal Procedure Code, 1973, defines
exhaustive procedure for executing the punishments of the crimes. Murder, rape, theft, fraud,
cheating and assault are some examples of criminal offences under the law.
Civil Law: Matters of disputes between individuals or organisations are dealt with under Civil
Law. Civil courts enforce the violation of certain rights and obligations through the institution of
a civil suit. Civil law primarily focuses on dispute resolution rather than punishment. The act of
process and the administration of civil law are governed by the Code of Civil Procedure, 1908
(CPC). Civil law can be further classified into Law of Contract, Family Law, Property Law, and Law
of Tort. Some examples of civil offences are breach of contract, non-delivery of goods, non-
payment of dues to lender or seller defamation, breach of contract, and disputes between
landlord and tenant.
Common Law: A judicial precedent or a case law is common law. A judgment delivered by the
Supreme Court will be binding upon the courts within the territory of India under Article 141 of
the Indian Constitution. The doctrine of Stare Decisis is the principle supporting common law. It
is a Latin phrase that means “to stand by that which is decided.” The doctrine of Stare Decisis
reinforces the obligation of courts to follow the same principle or judgement established by
previous decisions while ruling a case where the facts are similar or “on all four legs” with the
earlier decision.
Principles of Natural Justice: Natural justice, often known as Jus Natural deals with certain
fundamental principles of justice going beyond written law. Nemo judex in causa sua (Literally
meaning “No one should be made a judge in his own cause, and it’s a Rule against Prejudice), audi
alteram partem (Literally meaning “hear the other party or give the other party a fair hearing),
and reasoned decision are the rules of Natural Justice. A judgement can override or alter a
common law, but it cannot override or change the statute.
05 - What is Law and what is the process/procedure of making a law?
4)c)6m,MDTP1, ICAI Module, RTP,Sept2024, 4)c)6m,MTP1,Sept2024,
4)c)6m,MTP1,Jan2025
CA NIKESH AGRAWAL 3
,BUSINESS LAWS QUESTION BANK CHAPTER: 1
Ans - What is Law?
Law is a set of obligations and duties imposed by the government for securing welfare and
providing justice to society. India’s legal framework reflects the social, political, economic, and
cultural aspects of our vast and diversified country.
The Process of Making a Law
i) When a law is proposed in parliament, it is called a Bill.
ii) After discussion and debate, the law is passed in Lok Sabha.
iii) Thereafter, it has to be passed in Rajya Sabha.
iv) It then has to obtain the assent of the President of India.
v) Finally, the law will be notified by the Government in the publication called the Official
Gazette of India.
vi) The law will become applicable from the date mentioned in the notification as the
effective date.
vii) Once it is notified and effective, it is called an Act of Parliament.
04 - What is the structure of the Indian Judicial System, and what is the hierarchy of
courts in India? 4)c)6m,MDTP6, 4)c)6m,MTP2Sept2024, 4)c)6m,Jan2025
OR
What do you understand by Indian Judicial System and what are its various functions?
RTP,June2024
Ans - When there is a dispute between citizens or between citizens and the Government, these
disputes are resolved by the judiciary.
The functions of judiciary system of India are:
• Regulation of the interpretation of the Acts and Codes,
• Dispute Resolution,
• Promotion of fairness among the citizens of the land.
In the hierarchy of courts, the Supreme Court is at the top, followed by the High Courts and
District Courts. Decisions of a High Court are binding in the respective state but are only
persuasive in other states. Decisions of the Supreme Court are binding on all High Courts under
CA NIKESH AGRAWAL 4
, BUSINESS LAWS QUESTION BANK CHAPTER: 1
Article 141 of the Indian Constitution. In fact, a Supreme Court decision is the final word on the
matter.
i) Supreme Court
The Supreme Court is the apex body of the judiciary. The Chief Justice of India is the
highest authority appointed under Article 126. The principal bench of the Supreme Court
consists of seven members including the Chief Justice of India.
ii) High Court
The highest court of appeal in each state and union territory is the High Court. Article
214 of the Indian Constitution states that there must be a High Court in each state. The
High Court has appellant, original jurisdiction, and Supervisory jurisdiction. However,
Article 227 of the Indian Constitution limits a High Court’s supervisory power.
iii) District Court
Below the High Courts are the District Courts. The Courts of District Judge deal with
Civil law matters i.e. contractual disputes and claims for damages etc., The Courts of
Sessions deals with Criminal matters.
Under pecuniary jurisdiction, a civil judge can try suits valuing not more than Rupees two
crore.
iv) Metropolitan courts
Metropolitan courts are established in metropolitan cities in consultation with the High
Court where the population is ten lakh or more. Chief Metropolitan Magistrate has powers
as Chief Judicial Magistrate and Metropolitan Magistrate has powers as the Court of a
Magistrate of the first class.
03 - Describe in brief about the following Regulatory bodies of the Government of India: -
i) Securities and Exchange Board of India
ii) Reserve Bank of India
iii) Insolvency and Bankruptcy Board of India
4)c)6m,MDTP8,9, 4)c)6m,June2024, 4)c)6m,MTP2,Jan2025
Ans –
i) The Securities and Exchange Board of India (SEBI):
CA NIKESH AGRAWAL 5
Chapter: 1 – Indian Regulatory Framework
Question Bank (Updated till Jan2025 Attempt)
CA NIKESH AGRAWAL 2
,BUSINESS LAWS QUESTION BANK CHAPTER: 1
06 – Explain the types of laws in the Indian Legal System considering the Indian Regulatory
Framework? 4)c)6m,MDTP1,5,7,10, 4(c)6m,Sept2024, 4)c)6m,MTP1,June2024
Ans - The laws in the Indian legal system could be broadly classified as follows:
Criminal Law: Criminal law is concerned with laws pertaining to violations of the rule of law or
public wrongs and punishment of the same. Criminal Law is governed under the Indian Penal Code,
1860, and the Code of Criminal Procedure, 1973 (Crpc). The Indian Penal Code, 1860, defines the
crime, its nature, and punishments whereas the Criminal Procedure Code, 1973, defines
exhaustive procedure for executing the punishments of the crimes. Murder, rape, theft, fraud,
cheating and assault are some examples of criminal offences under the law.
Civil Law: Matters of disputes between individuals or organisations are dealt with under Civil
Law. Civil courts enforce the violation of certain rights and obligations through the institution of
a civil suit. Civil law primarily focuses on dispute resolution rather than punishment. The act of
process and the administration of civil law are governed by the Code of Civil Procedure, 1908
(CPC). Civil law can be further classified into Law of Contract, Family Law, Property Law, and Law
of Tort. Some examples of civil offences are breach of contract, non-delivery of goods, non-
payment of dues to lender or seller defamation, breach of contract, and disputes between
landlord and tenant.
Common Law: A judicial precedent or a case law is common law. A judgment delivered by the
Supreme Court will be binding upon the courts within the territory of India under Article 141 of
the Indian Constitution. The doctrine of Stare Decisis is the principle supporting common law. It
is a Latin phrase that means “to stand by that which is decided.” The doctrine of Stare Decisis
reinforces the obligation of courts to follow the same principle or judgement established by
previous decisions while ruling a case where the facts are similar or “on all four legs” with the
earlier decision.
Principles of Natural Justice: Natural justice, often known as Jus Natural deals with certain
fundamental principles of justice going beyond written law. Nemo judex in causa sua (Literally
meaning “No one should be made a judge in his own cause, and it’s a Rule against Prejudice), audi
alteram partem (Literally meaning “hear the other party or give the other party a fair hearing),
and reasoned decision are the rules of Natural Justice. A judgement can override or alter a
common law, but it cannot override or change the statute.
05 - What is Law and what is the process/procedure of making a law?
4)c)6m,MDTP1, ICAI Module, RTP,Sept2024, 4)c)6m,MTP1,Sept2024,
4)c)6m,MTP1,Jan2025
CA NIKESH AGRAWAL 3
,BUSINESS LAWS QUESTION BANK CHAPTER: 1
Ans - What is Law?
Law is a set of obligations and duties imposed by the government for securing welfare and
providing justice to society. India’s legal framework reflects the social, political, economic, and
cultural aspects of our vast and diversified country.
The Process of Making a Law
i) When a law is proposed in parliament, it is called a Bill.
ii) After discussion and debate, the law is passed in Lok Sabha.
iii) Thereafter, it has to be passed in Rajya Sabha.
iv) It then has to obtain the assent of the President of India.
v) Finally, the law will be notified by the Government in the publication called the Official
Gazette of India.
vi) The law will become applicable from the date mentioned in the notification as the
effective date.
vii) Once it is notified and effective, it is called an Act of Parliament.
04 - What is the structure of the Indian Judicial System, and what is the hierarchy of
courts in India? 4)c)6m,MDTP6, 4)c)6m,MTP2Sept2024, 4)c)6m,Jan2025
OR
What do you understand by Indian Judicial System and what are its various functions?
RTP,June2024
Ans - When there is a dispute between citizens or between citizens and the Government, these
disputes are resolved by the judiciary.
The functions of judiciary system of India are:
• Regulation of the interpretation of the Acts and Codes,
• Dispute Resolution,
• Promotion of fairness among the citizens of the land.
In the hierarchy of courts, the Supreme Court is at the top, followed by the High Courts and
District Courts. Decisions of a High Court are binding in the respective state but are only
persuasive in other states. Decisions of the Supreme Court are binding on all High Courts under
CA NIKESH AGRAWAL 4
, BUSINESS LAWS QUESTION BANK CHAPTER: 1
Article 141 of the Indian Constitution. In fact, a Supreme Court decision is the final word on the
matter.
i) Supreme Court
The Supreme Court is the apex body of the judiciary. The Chief Justice of India is the
highest authority appointed under Article 126. The principal bench of the Supreme Court
consists of seven members including the Chief Justice of India.
ii) High Court
The highest court of appeal in each state and union territory is the High Court. Article
214 of the Indian Constitution states that there must be a High Court in each state. The
High Court has appellant, original jurisdiction, and Supervisory jurisdiction. However,
Article 227 of the Indian Constitution limits a High Court’s supervisory power.
iii) District Court
Below the High Courts are the District Courts. The Courts of District Judge deal with
Civil law matters i.e. contractual disputes and claims for damages etc., The Courts of
Sessions deals with Criminal matters.
Under pecuniary jurisdiction, a civil judge can try suits valuing not more than Rupees two
crore.
iv) Metropolitan courts
Metropolitan courts are established in metropolitan cities in consultation with the High
Court where the population is ten lakh or more. Chief Metropolitan Magistrate has powers
as Chief Judicial Magistrate and Metropolitan Magistrate has powers as the Court of a
Magistrate of the first class.
03 - Describe in brief about the following Regulatory bodies of the Government of India: -
i) Securities and Exchange Board of India
ii) Reserve Bank of India
iii) Insolvency and Bankruptcy Board of India
4)c)6m,MDTP8,9, 4)c)6m,June2024, 4)c)6m,MTP2,Jan2025
Ans –
i) The Securities and Exchange Board of India (SEBI):
CA NIKESH AGRAWAL 5
