MCQs on Insolvency and Bankruptcy Code, 2016 Part -6

Q.1:- What are the powers of Adjudicating Authority on repayment plan:

• It may provide for directions for implementing the repayment plan.
• It shall by an order approve or reject the repayment plan on the basis of the report of the meeting of the creditors submitted by the resolution professional under section 112.
• It may direct the resolution professional to re-convene a meeting of the creditors for reconsidering the repayment plan.
• All the options are correct.

Q.2:- What would be position where a secured creditor participates in the voting on the repayment plan by submitting an affidavit as required under sub-section 110 (3):

• The secured and un secured parts of the debt shall be treated as separate debts.
• The secured part of the debt shall be treated as separate debts.
• The unsecured part of the debt shall be treated as separate debts.
• None of the above.

Q.3:- The resolution professional shall submit the repayment plan under section 105 along with his report on such plan to the Adjudicating Authority from the last date of submission of claims under section102.

• within a period of twenty-one days
• Within a period of fourteen days
• After a period of twenty-one days
• After a period of fourteen days

Q.4:- What is time limit in which the resolution professional shall prepare the list of creditors as required under section 104 (1):

• Within thirty days from the date of the notice.
• Within fifteen days from the date of the notice.
• After thirty days from the date of the notice
• After fifteen days from the date of the notice

Q.5:- Moratorium period have the following effect:

• The creditors shall not initiate any legal action or legal proceedings in respect of any debt;
• The debtor shall not transfer, alienate, encumber or dispose of any of his assets or his legal rights or beneficial interest there in;
• Any pending legal action or proceeding in respect of any debt shall be deemed to have been stayed
• All of the above options.

Q.6:- The Adjudicating Authority shall, from the date of submission of the report under section 99 pass an order either admitting or rejecting the application referred to in section 94 or 95, as the case may be:

• Within fourteen days
• Within seven days
• After fourteen days
• After seven days

Q.7:- The IBBI shall, __________of the receipt of a reference from the Adjudicating Authority recommend the name of the resolution professional to the Adjudicating Authority against whom no disciplinary proceedings are pending:

• within ten days
• within seven days
• within fourteen days
• within three days

Q.8:- The Board shall nominate a resolution professional of receiving the direction issued by the Adjudicating Authority where an application under section 94 or 95 is filed by the debtor or the creditor himself and not through the resolution professional:

• Within ten days
• Within seven days
• After ten day
• After seven days

Q.9:- Where the application has been made in relation to a firm, the interim-moratorium shall operate___________ as on the date of the application:

• Against more than one partner of the firm
• Against any one partner of the firm
• Against all the partners of the firm
• None of the above

Q.10:- For initiation of the insolvency resolution process, what process have to undergo by a debtor who commits default:

• A debtor who commits a default may apply, through a resolution professional, to the Adjudicating Authority for initiating the insolvency resolution process, by submitting an application.
• A debtor who commits a default may apply, personally to the Adjudicating Authority for initiating the insolvency resolution process, by submitting an application.
• A debtor who commits a default may apply to the court of law having jurisdiction initiating the insolvency resolution process, by submitting an application.
• Both the options A and B are correct.

Q.11:- The Board shall __________of receipt of directions from the Adjudicating Authority under communicate to the Adjudicating Authority in writing either confirming or rejecting the appointment of the resolution professional and nominating another resolution professional for the insolvency resolution process:

• within fourteen days
• after fourteen days
• within seven days
• after seven days

Q.12:- The resolution professional shall examine the application referred to in section 94 or section 95,as the case may be, of his appointment, and submit a report to the Adjudicating Authority recommending for approval or rejection of the application:

• Within seven days
• Within ten days
• After ten days
• After seven days

Q.13:- After admission of the application under section 100, a moratorium shall commence in relation to all the debts and shall cease to have effect at the end of the period of__________ beginning with the date of admission of the application or on the date the Adjudicating Authority passes an order on the repayment plan under section 114,__________:

• 182 days, whichever is earlier
• 90 days, whichever is earlier
• 182 days, whichever is later
• 90 days, whichever is later

Q.14:- The Adjudicating Authority shall issue a public notice, published in atleast one English and one vernacular newspaper which is in circulation in the_____________

• State where the majority of the creditors resides.
• State where the Insolvency Professional resides.
• State where the debtor resides.
• State where office of the Adjudicating Authority is situated.

Q.15:- The repayment plan may authorize or require the resolution professional to:

• Administer or dispose of any funds of the debtor.
• Carry on the debtor’s business or trade on his behalf or in his name.
• Realise the assets of the debtor.
• All of the above options are correct.

Q.16:- The resolution professional shall issue a notice calling the meeting, of the creditors__________ before the date fixed for such meeting.

• at least twenty one days
• At least seven days
• at least twenty eight days
• at least fourteen days

Q.17:- Where a secured creditor does not forfeit his right to enforce security, he shall submit an affidavit to the resolution professional at the meeting of the creditors stating:

• The estimated value of the unsecured part of the debt.
• That the right to vote exercised by the secured creditor is only in respect of the unsecured part of the debt.
• Both the options of A and B are correct
• None of the above

Q.18:- The resolution professional shall prepare a report of the meeting of the creditors on repayment plan, which shall contain:

• List of the creditors who were present or represented at the meeting, and the voting records of each creditor for all meetings of the creditors;
• Whether the repayment plan was approved or rejected and if approved, the list the modifications, if any;
• The resolutions which were proposed at the meeting and the decision on such resolutions; AND
• All the above options are correct

Q.19:- The resolution professional may apply to the Adjudicating Authority to extend the time mentioned In sub-section 117 (l) for such further period not exceeding_________:

• Seven days
• Three days
• Ten days
• Five days

Q.20:- The Adjudicating Authority shall forward a copy of the bankruptcy order passed under section 118 (4) to the for the purpose of recording entries in the register referred to in section196:

• Board
• District Court having jurisdiction
• Committee of Creditors
• High Court having jurisdiction

Q.21:- When are payment plan shall be deemed to have come to an end prematurely:

• If it has not been fully implemented in respect of all persons bound by it with in a reason able period.
• it has not been fully implemented in respect of all persons bound by it within the period as mentioned in the repayment plan.
• If it has not been fully implemented in respect of all persons bound by it within the period of one hundred eighty days.
• If it has not been fully implemented.

Q.22:- The repayment plan or any modification to the repayment plan shall be approved by________

• A majority of more than three-fourth in value of the creditors present in person or by proxy and voting on the resolution in a meeting of the creditors.
• A majority of more than one-fourth in value of the creditors present in person or by proxy and voting on the resolution in a meeting of the creditors.
• A majority of more than one-ten thin value of the creditors present in person or by proxy and voting on the resolution in a meeting of the creditors.
• A majority of more than two-third in value of the creditors present in person or by proxy and voting on the resolution in a meeting of the creditors.

Q.23:- The resolution professional may for a sufficient cause adjourn the meeting of the creditors for a period of__________ at a time.

• not more than fourteen days
• not more than three days
• not more than twenty one days
• not more than seven days

Q.24:- The resolution professional shall submit the repayment plan under section 105 along with his report, specifying the date, time and place at which, the meeting should be held. The date on which the meeting is to be held from the date of submission of report.

• shall be not less than fourteen days and not more than twenty eight days
• shall be not less than seven days and not more than fourteen days
• shall be not less than twenty one days and not more than twenty eight days
• shall be not less than fourteen days and not more than twenty one days

Q.25:- Who shall supervise the implementation of the repayment plan:

• The Creditors
• The Adjudicating Authority
• The Resolution Professional
• A and C jointly

Q.26:- The debtor or the creditor, whose claims under repayment plan have not been fully satisfied, shall be entitled to apply for a_________ under Chapter IV:

• Insolvency order
• Bankruptcy order
• Business discontinuance order
• Winding up order

Q.27:- How a discharge order is made:

• The creditors shall apply to the Adjudicating Authority for a discharge order in relation to the debts mentioned in the repayment plan and the Adjudicating Authority may pass such discharge order.
• The resolution professional shall apply to the Adjudicating Authority for a discharge order in relation to the debts mentioned in the repayment plan and the Adjudicating Authority may pass such discharge order.
• The resolution professional shall apply to the Adjudicating Authority for a discharge Order in relation to all the debts and the Adjudicating Authority may pass such discharge order.
• The debtor shall apply to the Adjudicating Authority for a discharge order in relation to the debts mentioned in the repayment plan and the Adjudicating Authority may pass such discharge order.

Q.28:- Where a repayment plan comes to an end prematurely, what information is are required by the resolution professional to the Adjudicating Authority:

• The reasons for premature end of the repayment plan
• The receipts and payments made in pursuance of the repayment plan.
• The details of the creditors whose claims have not been fully satisfied.
• All the above.

Q.29:- The resolution professional shall provide a copy of the report of the meeting of creditors prepared under section 99 to:

• the Adjudicating Authority. Notice of decisions taken at meeting of creditors.
• the creditors, including those who were not present at the meeting; and
• the debtor;
• All the above options are correct.

Q.30:- A creditor shall not been titled to vote in a meeting of the creditors if he:

• Is not a creditor mentioned in the list of creditors under section 104
• Is an associate of the debtor.
• Options A or B, both are correct
• None of the above

Q.31:- What is the provision for payment of fee to the resolution professional?

• It is paid by the creditors
• It is paid by the Adjudicating Authority.
• The Repayment Plan shall include the provision for repayment of the fee to the resolution professional.
• Either A or B

Q.32:- Where an order admitting the application under section 96 (Interim Moratorium) has been made in relation to a firm, the moratorium under sub­section 101 (1) shall operate:

• Against more than one partners of the firm.
• Against the firm.
• Against majority of the partners of the firm.
• Against all the partners of the firm.

Q.33:- The Adjudicating Authority shall provide a copy of the order passed under sub-section 100(1) along with the report of the resolution professional and the application referred to in section 94 or 95, as the case may be, to the creditors____________ from the date of the said order:

• within fourteen days
• within seven days
• after fourteen days
• after seven days

Q.34:- Where the debt for which an application has been filed by a creditor is registered with the ,the debtor shall not been titled to dispute the validity of such debt:

• Information provider
• Information container
• Information supplier
• Information utility

Q.35:- The IBBI shalls end a communication to the Adjudicating Authority___________ of receipt of the direction for confirmation or rejection of resolution professional:

• Within ten days
• Within three days
• Within fourteen days
• Within seven days

Q.36:- The Adjudicating Authority shall by order_________ the resolution professional recommended under sub-section 97 (2) or as nominated by the Board under sub­section 97(4):

• Hire
• Nominate
• Appoint
• None of the above

Q.37:- Where an application under section 94 or 95 is filed by the debtor or the creditor himself, as the case may be, and not through the resolution professional, the Adjudicating Authority shall direct the Board, of the filing of such application, to nominate a resolution professional for the insolvency resolution process:

• after seven days
• within ten days
• within seven days
• after ten days

Q.38:- What is the effect of Interim Moratoritum period:

• The creditors of the debtor shall not initiate any legal action or proceedings in respect of any debt
• Any pending legal action or proceeding in respect of any debt shall be deemed to have been stayed.
• Both of (A) and (B)
• Either of (A) or (B)

Q.39:- Who is the ‘Adjudicating Authority’ in the case of Insolvency Resolution and Bankruptcy for Individual and Partnership firms:

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

Q.40:- 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;
• 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;
• An unencumbered Second dwelling unit owned by the debtor of such value as may be prescribed 9
• 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

Q.41:- “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.42:- The bankruptcy trustee shall give notice to each of the creditors to submit proof of debt of preparing the list of creditors under section132:

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

Q.43:- While making calculation and distribution of the interim dividend, the bankruptcy trustee shall make provision for:

• Expenses necessary for the administration of the estate of the bankrupt
• Bankruptcy debts which are subject of claims which have not yet been determined
• Disputed proofs and claims
• All the options are correct.

Q.44:- Who is entitled to get the surplus, after making payment in full with interest to all the creditors of the bankrupt and the payment of the expenses of the bankruptcy:

• The Adjudicating Authority
• The Creditors, other than mentioned in the Resolution Plan.
• The bankrupt
• The bankruptcy trustee

Q.45:- What will be the order of priority in making payment to the Unsecured creditors inter-se:

• Lowest share of unsecured creditor shall be paid first and there after second lowest unsecured creditor and soon.
• Unsecured creditors shall not rank equally and payment will be made among them according to time duration of the debt. Longer time duration debt will be provided first.
• Highest share of unsecured creditor shall be paid first and there after second highest unsecured creditor and so on
• Unsecure creditors shall rank equally amongst themselves unless contractually agreed to the contrary by such creditors.

Q.46:- The bankruptcy trustee may, with the approval of the committee of creditors, divide in its existing form amongst the creditors, according to its any property in its existing form which from its peculiar nature or other special circumstances cannot be readily or advantageously sold:

• Estimated value
• Market value
• Realisable value
• Book Value

Q.47:- What will be the position of bankruptcy proceedings, if bankrupt dies:

• It may continue with the permission of the legal heirs.
• It will be discontinued.
• It may continue with the permission of the Adjudicating Authority.
• It will continue as if he were alive.

Q.48:- transaction will amount to undervalued transaction, if the bankrupt enters transaction with any person if:

• It is inconsideration of marriage
• He makes a gift to that person
• No consideration has been received by that person from the bankrupt
• All the options are correct.

Q.49:- Who can make an application challenging the disclaimer to the Adjudicating Authority

• Where the disclaimed property is a dwelling house, any person who on the date of application for bankruptcy was in occupation of or entitled to occupy that dwelling house.
• Any person who claims an interest in the disclaimed property.
• Any person who is under any liability in respect of the disclaimed property.
• All the options are correct.

Q.50:- After the enactment of the Code, certain Acts were amended. Which were these Act:

• The Income- Tax Act, 1961
• The Indian Partnership Act,1932
• The Central Excise Act,1944
• All of the above