MCQs on Case Analysis-Individuals and Partnership Firms

Q.1:- In the above case, apart from Rajwani, there are other creditors, who had also supplied goods to Creative Arts but were not paid. What recourse is available to other creditors:

• The other creditors may file separate insolvency resolution process against Creative Arts.
• The other creditors may join along with Rajwani
• The other creditors cannot join along with Rajwani
• Both B and C are correct

Q.2:- Whether Rajwani can initiate insolvency resolution process against Creative Arts:

• Rajwani through a resolution professional can initiate insolvency resolution process against Creative Arts
• Rajwani can initiate insolvency resolution process against any of the partner of the Creative Arts
• Rajwani himself can initiate insolvency resolution process against Creative Arts
• All the options are correct.

Q.3:- If all the eligibility conditions for applying a fresh start is fulfilled, then where the application for the fresh start is to be made:

• Insolvency and Bankruptcy Board of India
• National Company Law Tribunal
• Insolvency Professional Agency
• Debt Recovery Tribunal

Q.4:- Whether Deepak is eligible to make an application for fresh start:

• Yes, Deepak is eligible since he is not having any dwelling unit in his own name.
• Yes, Deepak is eligible since the aggregate value of his assets is not exceeding Rs 20000. Since all such assets are from borrowed funds.
• Yes, Deepak is eligible since the aggregate value of his assets is not exceeding Rs 20000. Since all such assets are from borrowed funds.
• No, Deepak is not eligible since the qualifying debts exceeds Rs 35000.

Q.5:- Rajwani wants to initiate insolvency resolution process against Rohan, who is one of the partner of Creative Arts, instead against the firm’s name. Whether he can do so:

• No, Rajwani cannot initiate insolvency process against any of the partner but only in the firm’s name.
• Yes, Rajwani can initiate insolvency process the designated partner only.
• Yes, Rajwani can initiate insolvency process against any of the partner.
• None of the above.

Q.6:- What would have been the position, if Deepak’s qualifying debts were to the tune of Rs 20000.

• Deepak’s gross annual income is less than Rs 60000 hence he is eligible.
• In that case, he is eligible for fresh start since his qualifying debts are not exceeding Rs. 35000.
• Irrespective of the qualifying debt, Deepak is eligible to apply for fresh start since he has incurred huge losses in the business.
• None of above

Q.7:- What documents are required to be produced by Rajwani before the Adjudicating Authority:

• the relevant evidence of such default or non-repayment of debt
• the debts owed by the Creative Arts to Rajwani Handicrafts submitting the application for insolvency resolution process as on the date of application
• the failure by the Creative Arts to pay the debt within a period of fourteen days of the service of the notice of demand
• all of the above

Q.8:- Part III of the I&B Code shall apply to matters relating to fresh start, insolvency and bankruptcy of individuals and partnership firms where the amount of the default is:

• Not less than one thousand rupees
• Not less than Ten thousand rupees
• Less than one thousand rupees
• Less than Ten thousand rupees