MCQs on Insolvency and Bankruptcy Code, 2016 Part -5

Q.1:- How an application for fast track corporate insolvency resolution process may be made:

• A corporate debtor with such class of creditors or such amount of debt as maybe notified by the Central Government.
• Such other category of corporate persons as may be notified by the Central Government.
• A corporate debtor with assets and income below a level as may be notified by the Central Government.
• Any of the above options.

Q.2:- An application for Fast Track Corporate Insolvency Resolution Process may be filed by a creditor or corporate debtor, as the case may be, along with:

• Such other information as maybe specified by the Board to establish that the corporate debtor is eligible for fast track corporate insolvency resolution process.
• The proof of the existence of default as evidenced by records available with an information utility or such other means as maybe specified by the Board
• Both A and B above
• None of the above

Q.3:- What is the time period for completion of fast track corporate insolvency resolution process:

• within a period of two hundred seventy days from the insolvency commencement date.
• within a period of One hundred eighty days from the insolvency commencement date.
• within a period of ninety days from the insolvency commencement date.
• within a period of forty five days from the insolvency commencement date.

Q.4:- The extension in the period of the fast track corporate insolvency resolution process beyond ninety days may be allowed by the Adjudicating Authority on the application filed by the resolution professional:

• If a resolution is passed at a meeting of the committee of creditors and supported by a vote of ninety percent of the voting share.
• If a resolution is passed at a meeting of the committee of creditors and supported by a vote of seventy five percent of the voting share.
• If a resolution is passed at a meeting of the committee of creditors and supported by a vote of sixty six percent of the voting share.
• If a resolution is passed at a meeting of the committee of creditors and supported by a vote of simple majority.

Q.5:- For the matters relating to fresh start, insolvency and bankruptcy of individuals and partnership firms what is the minimum amount of default:

• The amount of the default is not less than ten thousand rupees.
• The amount of the default is not less than five hundred rupees.
• The amount of the default is not less than fifty thousand rupees.
• The amount of the default is not less than one thousand rupees.

Q.6:- “Excluded debt” means:

• liability to pay maintenance to any person under any law for the time being in force
• liability in relation to a student loan
• liability to pay fine imposed by a court or tribunal
• all of the above

Q.7:- “bankruptcy debt”, in relation to a bankrupt, means

• any interest which is a part of the debt under section171.
• any debt for which he may be come liable after bankruptcy commencement date but before his discharge by reason of any transaction entered into before the bankruptcy commencement date
• any debt owed by him as on the bankruptcy commencement date;
• All of the above.

Q.8:- Who is not called as ‘Associate’ of the debtor:

• a person who is in partnership with the debtor;
• a person who is a relative of the debtor or a relative of the spouse of the debtor;
• a person who is employer of the debtor or employee of the debtor;
• a person who is close friend of the debtor

Q.9:- “Repayment plan” means:

• a plan prepared by the Adjudicating Authority in consultation with the resolution professional under section 105 containing a proposal to the committee of creditors for restructuring of his debts or affairs.
• a plan prepared by the debtor in consultation with the Adjudicating Authority containing a proposal to the committee of creditors for restructuring of his debts or affairs
• a plan prepared by the resolution professional under section 105 containing a proposal to the committee of creditors for restructuring of his debts or affairs.
• a plan prepared by the debtor in consultation with the resolution professional under section 105 containing a proposal to the committee of creditors for restructuring of his debts or affairs

Q.10:- “Bankruptcy commencement date” means:

• The date on which the appointment of resolution professional is made.
• The date on which an application is filed with the Adjudicating Authority.
• The date on which the application is accepted by the Adjudicating Authority.
• The date on which a bankruptcy order is passed by the Adjudicating Authority under section1268

Q.11:- “bankruptcy” means:

• Any person adjudged as an un-discharged insolvent.
• debtor who has been adjudged as bankrupt by a bankruptcy order under section 126 of the Code.
• the state of being bankrupt
• Each of the partners of a firm, where bankruptcy order under section 126 has been made against a firm.

Q.12:- Who is the ‘Adjudicating Authority’ in the case of Insolvency Resolution and Bankruptcy for Individual and Partnership firms:

• Debt Recovery Tribunal
• National Company Law Tribunal
• Debt Recovery Appellate Tribunal
• National Company Law Appellate Tribunal

Q.13:- Which among the following is not termed “Excluded assets” for the purposes of Part III:

• Unencumbered furniture, household equipment and provisions as are necessary for satisfying the basic domestic needs of the bankrupt and his immediate family;
• Unencumbered tools, books, vehicles and other equipment as are necessary to the debtor or bankrupt for his personal use or for the purpose of his employment, business or vocation
• An unencumbered Second dwelling unit owned by the debtor of such value as may be prescribed 9
• Any unencumbered personal ornaments of such value, as may be prescribed, of the debtor or his immediate family which cannot be parted with, in accordance with religious usage;

Q.14:- “Bankrupt” means:

• Each of the partners of a firm, where a bankruptcy order under section 126 has been made against a firm.
• A debtor who has been adjudged as bankrupt by a bankruptcy order under section 126 of the Code.
• Any person adjudged as an un-discharged insolvent.
• All of the above

Q.15:- “qualifying debt” means:

• A debt to the extent it is secured
• Amount due which includes interest any other sum due in respect of the amounts owed under any contract, by the debtor for a liquidated sum either immediately or at certain future time
• Any debt which has been incurred three months prior to the date of the application for fresh start process
• An excluded debt;

Q.16:- “Partnership debt” means:

• A debt for which majority of the partners in a firm are jointly liable.
• A debt for which all the partners in a firm are jointly and severally liable.
• A debt for which some of the partners in a firm are jointly liable
• A debt for which all the partners in a firm are jointly liable

Q.17:- The Adjudicating Authority shall discharge the debtor from the following liabilities:

• Interest including penal interest in respect of the qualifying debts from the date of application till the date of the discharge order; and
• Penalties in respect of the qualifying debts from the date of application till the date of the discharge order;
• Any other sums owed under any contract in respect of the qualifying debts from the date of application till the date of the discharge order.
• All the options are correct

Q.18:- Whether Resolution Professional as appointed by the IBBI under section 82(5) can be replaced:

• It can be replaced by the debtor only
• Debtor or creditor may file an application to the Adjudicating Authority for replacement of such Resolution Professional.
• No, once appointed by the IBBI, it cannot be replaced
• In can be replaced by the creditor only

Q.19:- What is the effect of the moratorium period:

• Subject to the provisions of section 86, the creditors shall not initiate any legal action or proceedings in respect of any debt.
• Any pending legal action or legal proceeding in respect of any debt shall be deemed to have been stayed.
• Both A and B are correct.
• None of the above

Q.20:- From which date the moratorium period ceased to have effect:

• It ceases to have effect at the end of the period of one hundred and eighty days beginning with the date of admission.
• It ceases to have effect at the end of the period of forty five days beginning with the date of admission.
• It ceases to have effect at the end of the period of two hundred seventy days beginning with the date of admission.
• It ceases to have effect at the end of the period of ninety days beginning with the date of admission.

Q.21:- The Adjudicating Authority may from the date of submission of the report by the resolution professional, pass an order either admitting or rejecting the application made under section 81 (1) Relating to the fresh start order:

• within fourteen days
• within twenty one days
• within seven days
• within twenty eight days

Q.22:- What will be the effect of the interim moratorium period:

• No creditor shall initiate any legal action or proceedings in respect of such debt.
• Any legal action or legal proceeding pending in respect of any of his debts shall be deemed to have been stayed.
• Both A and B
• None of the above

Q.23:- For fresh start, the gross annual income of the debtor should be:

• not exceeding sixty thousand rupees
• not exceeding twenty thousand rupees
• not exceeding eighty thousand rupees
• not exceeding forty thousand rupees

Q.24:- One of the condition is that no previous fresh start under Chapter II of Part III has been made in relation to the individual debtor in the preceding of the date of the application for fresh start:

• Nine months
• Three months
• Twelve months
• Six months

Q.25:- The resolution professional shall examine the application made under section 80 _________ of his appointment, and submit a report to the Adjudicating Authority, either recommending acceptance or rejection of the application:

• within fifteen days
• within seven days
• within twenty days
• within ten days

Q.26:- From which date the moratorium period shall commence in the case of fresh start:

• On the date of admission of the application, the moratorium period shall commence in respect of all the debts.
• On the date when the application is rejected by the Adjudicating Authority.
• On the date when the resolution profession is appointed.
• On the date when the application is filed with the Adjudicating Authority.

Q.27:- The objections raised by the creditor be examined and it should be accepted or rejected by the resolution professional of the date of the application:

• within twenty days
• within five days
• within ten days
• within fifteen days

Q.28:- The application containing the objections raised by the creditor or debtor shall be decided by the Adjudicating Authority of such application, and make an order as it deems fit.

• Within twenty eight days
• Within seven days
• Within twenty one days
• Within fourteen days

Q.29:- Under the Fresh Start Process, the resolution professional shall prepare a finalist of qualifying debts and submit such list to the Adjudicating Authority comes to an end:

• atleast seven days before the moratorium period
• atleast three days before the moratorium period
• atleast seven days after the moratorium period
• atleast three days after the moratorium period

Q.30:- A copy of the order passed by the Adjudicating Authority under section 84 (1) along with a copy of the application shall be provided to the creditors mentioned in the application of the passing of the order:

• within twenty eight days
• within twenty one days
• within seven days
• within fourteen days

Q.31:- The aggregate value of the qualifying debts under the fresh start:

• does not exceed thirty-five thousand rupees
• does not exceed twenty-five thousand rupees
• does not exceed forty five thousand rupees
• does not exceed thirty thousand rupees

Q.32:- An individual debtor may apply, for a fresh start under this Chapter in respect of his qualifying debts to the Adjudicating Authority:

• Either personally or through a resolution professional.
• Through a resolution professional
• Personally
• Through an Advocate

Q.33:- During the moratorium period, the debtor shall:

• inform his business partners that he is undergoing a fresh start process
• Act as a director of any company, or directly or indirectly take part in or be concerned in the promotion, formation or management of a company
• Travel out side India except with the permission of the Adjudicating Authority.
• Dispose of or alienate any of his assets

Q.34:- A copy of the order passed by the Adjudicating Authority under section 91 shall be provided to the _________for the purpose of recording an entry in the register referred to in section 196:

• DRAT
• Board
• DRT
• None of the above

Q.35:- The Adjudicating Authority shall__________ of the receipt of the application of objections under section 89(l) make a reference to the Board for replacement of the resolution professional:

• within fourteen days
• within ten days
• within seven days
• within twenty days

Q.36:- The debtor or the creditor who is aggrieved by the action taken by the resolution professional under section 86 may, _________of such decision, make an application to the Adjudicating Authority challenging such action:

• Within twenty days
• Within fifteen days
• Within ten days
• Within five days

Q.37:- The debtor shall furnish the required information or explanation to the resolution professional ____________ of receipt of the request:

• Within seven days
• Within fifteen days
• Within three days
• Within ten days

Q.38:- When an interim-moratorium shall commence:

• The date when resolution professional is appointed
• The date when an application is filed by a debtor under section 80.
• The date when the Committee of Creditors if formed.
• The date when the debtor is unable to debts due.

Q.39:- A debtor, who is unable to pay his debt shall make an application for a fresh start for discharge of his qualifying debt, if he fulfils the following conditions. Which of the following is not such condition:

• the aggregate value of the qualifying debts does not exceed thirty-five thousand rupees
• the gross annual income of the debtor does not exceed sixty thousand rupees;
• he is not an un-discharged bankrupt
• the aggregate value of the assets of the debtor exceeds twenty thousand rupees

Q.40:- One of the condition of fresh start for the individual debtor is that:

• He may own a dwelling unit ,but the same has been given on rent and the tenants are neither paying the rent nor vacating the house.
• he may own a dwelling unit, but the same is under mortgage
• he does not own a dwelling unit
• he own a dwelling unit

Q.41:- Where an application under section 80 is filed by the debtor himself and not through the resolution professional, the Adjudicating Authority shall direct the Board of the date of the receipt of an application to nominate a resolution professional for the fresh start process:

• within ten days
• within seven days
• Within three days
• within fifteen days

Q.42:- To whom the resolution professional may apply for the directions in relation to any other matter under fresh start process:

• Debt Recovery Appellate Tribunal
• Debt Recovery Tribunal
• National company Appellate Tribunal
• National Company Law Tribunal

Q.43:- The Adjudicating Authority shall, of the receipt of the application from the resolution professional for revocation of order under sub-section 91 (1), may by order admit or reject the application:

• Within twenty one days
• Within seven days
• Within twenty eight days
• Within fourteen days

Q.44:- The Board shall, of the receipt of a reference from the Adjudicating Authority under section 89 (2), recommend the name of an insolvency professional to the Adjudicating Authority against whom no disciplinary proceedings are pending:

• within fifteen days
• Within five day
• within twenty days
• within ten days

Q.45:- What are the general duties of a debtor:

• Any change in financial circumstances after the date of application, where such change has an impact on the fresh start process.
• Make available to the resolution professional all information relating to his affairs, attend meetings and comply with the requests of the resolution professional in relation to the fresh start process.
• Inform the resolution professional of any material error or omission in relation to the information or document supplied to the resolution professional;
• All the options are correct.

Q.46:- On what ground the debtor or creditor, who is aggrieved by the action taken by the resolution professional under section 86 may raise objections by making an application to the Adjudicating Authority:

• That the resolution professional has not complied with the requirements of section 86.
• That the resolution professional has not given an opportunity to the debtor or the creditor to make a representation.
• That the resolution professional colluded with the other party in arriving at the decision.
• All of the above

Q.47:- Any creditor mentioned in the order of the Adjudicating Authority under section 84 to whom a qualifying debt is owed may,__________ from the date of receipt of the order under section 84, object only on the following grounds, namely inclusion of a debt as a qualifying debt; or in correctness of the details of the qualifying debt:

• within a period of fourteen days
• within a period of seven days
• within a period of twenty days
• within a period of ten days

Q.48:- The Board shall nominate a resolution Professional ____________ of receiving the direction issued by the Adjudicating Authority under section 82 (3):

• Within ten days
• Within twenty days
• Within seven days
• Within fifteen days

Q.49:- On what grounds the resolution professional may submit an application to the Adjudicating Authority seeking revocation of its order made under section84:

• if the debtor has acted in a mala fide manner and has willfully failed to comply with the provisions of this Chapter.
• if due to any change in the financial circumstances of the debtor, the debtor is ineligible for a fresh start process
• non-compliance by the debtor of the restrictions imposed under sub-section (3) of section 85
• All the options are correct.

Q.50:- The resolution professional shall perform his functions and duties in compliance with the code of conduct provided under__________:

• Section 212
• Section 208
• Section 214
• Section 210