Question:Identify the status of the new firm Polyphonic and also its rights and liabilities in accordance with the Partnership Act 1932, state the remedies available to NSU and Polyphonic as per the Sale of Goods Act 1930, and also, identify the violations of different provisions of the Companies Act 1994 by the new company Polyphonic:

Two software firms, 'Arsenic' and 'Plutonic', having ten members each, amalgamate their business by an oral contract between the partners. The newly created firm, titled polyphonic, then starts doing its business of importing computer monitors from China and Korea. Accordingly, 'Polyphonic' enters into a contract with 'Samsung' to supply 2000 computer monitors of its latest model in two instalments. The monitors were described as 17 inches in size. However, Samsung delivered 1000 monitors in time, but failed to deliver the second instalment within deadline. Polyphonic tried to bring legal action against Samsung to claim compensation, but Samsung claimed that the legal action was not valid as per the law, since Polyphonic was an unregistered firm.

Meanwhile, NSU entered into a contract with Polyphonic to buy 100 monitors for its computer lab. Polyphonic described the monitors as the latest model of Samsung and 17 inches in size. Polyphonic asked NSU to visit the shop and examine the monitors before delivery, but NSU officials did not have any time to do so. While setting them in the Lab, the technician of NSU noticed that the monitors were 16 inches in size and were not suitable for installing on the wall. NSU conveyed the objection to Polyphonic.

During investigation, Polyphonic found that the monitors supplied by the Samsung were all 16 inches in size. Polyphonic now wants to cancel the contract, and also to claim compensation, but Samsung was willing to pay compensation only, since Polyphonic accepted the first instalment without any objection. Polyphonic understood their negligence and therefore hired an expert engineer in the procurement section and made him one of the partners with a new profit sharing ratio.

However, Polyphonic soon received a notice from the Government Authority to stop the business since it has already become an illegal association. Accordingly, they formed a public limited company under the same name on 1st January, 2019. On the basis of the prospectus issued by the Company, many people showed interest in buying shares and the number increased very quickly. On 21st January, 2019, the company held a general meeting of its members to fulfil the statutory requirements. On 25 September 2020, an AGM was held where no dividend was issued. Five members having one-third of the issued share capital requested the Board of Directors to hold an EGM on that issue, but no EGM was convened. Subsequently, one member filed a suit for the winding up of the Company due to non-compliance with the rule regarding AGM under the Companies Act 1994.