Model Question Paper (31st December 2016 to 30th June 2017) Part-1

Q.1:- The corporate debtor shall not be deemed to have given a preference if—

• the transfer has the effect of putting the transferee in a position better than what would have been in the event of distribution of assets under section 53.
• the transfer of property is on account of an antecedent financial debt.
• the transfer of property is for the benefit of a surety.
• the transfer creates a security interest in a property to the extent that such security interest secures new value.

Q.2:- A debtor may make an application for a fresh start for discharge of

• qualifying debts.
• bankruptcy debts.
• operational debts
• all debts.

Q.3:- A committee of creditors comprises of..................

• secured creditors only.
• financial and operational creditors.
• independent financial creditors only.
• all financial creditors.

Q.4:- Any person aggrieved by the order of the National Company Law Tribunal may make an appeal to

• Supreme Court.
• Debt Recovery Tribunal.
• National Company Law Appellate Tribunal.
• High Court.

Q.5:- The provisions of which of the following apply to the proceedings before a special court under the Insolvency and Bankruptcy Code, 2016?

• the Insolvency and Bankruptcy Code, 2016
• the Code of Criminal Procedure, 1973
• the Civil Procedure Code, 1908
• the Indian Penal Code, 1860

Q.6:- An operational creditor shall pay a fee of Rs_______along with an application for initiation of the corporate insolvency resolution process.

• 15,000
• 5,000
• 2,000
• 25,000

Q.7:- The Registered Valuers appointed by the Resolution Professional are required to estimate the liquidation value on the basis of __________:

• records of the information utilities.
• physical verification of assets of the corporate debtor.
• records with Depositories.
• records of the corporate debtor.

Q.8:- The notice of receipt of an application for surrender of registration by an insolvency professional agency shall be published by the Insolvency and Bankruptcy Board of India on its website within - days of its receipt.

• 10
• 2
• 5
• 7

Q.9:- Which among the following is not eligible for registration as an insolvency professional under the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016?

• Pass in Limited Insolvency Examination and Experience of 10 years as a Chartered Accountant
• Pass in National Insolvency Examination
• Pass in Limited Insolvency Examination and Experience of 10 years as a Company Secretary
• Pass in Limited Insolvency Examination and Experience of 10 years in management after receiving bachelor’s degree

Q.10:- The Code proposed by the Bankruptcy Law Reforms Committee provides for creditors and debtors to negotiate in an orderly and non­ conflicted manner.

• committee
• forum
• negotiation period
• calm period

Q.11:- The Corporate Social Responsibility Committee must have at least .... independent directors.

• Two
• One
• 2/3
• 1/3

Q.12:- A limited liability partnership firm shall, within a period of six months from the end of each financial year, preparefor the said financial year as at the last day of the said financial year.

• statements of accounts and solvency
• statements of assets and liabilities of partners
• statements of financial accounts
• statements of accounts

Q.13:- Under the Transfer of Property Act, 1882, the expression ‘registered’ pertains to

• registration of parties
• registration of property
• registration of charges
• registration of documents

Q.14:- Which of the following Acts have not been amended by the Insolvency and Bankruptcy Code, 2016?

• The Limited Liability Partnership Act, 2008
• The Transfer of Property Act, 1882
• The Income Tax Act, 1961
• The Companies Act, 2013

Q.15:- Securities and Exchange Board of India does not regulate

• commodity derivatives
• securities
• ULIPs
• mutual funds

Q.16:- Balance sheet of a company does not show..............

• financial health of the company
• what the company owns and what the company owes
• income and expenditure of the company
• assets and liabilities of the company

Q.17:- Banks can freely provide Loans/Advances against...............

• certificates of deposit
• partly paid equity share of the companies
• minted gold coins weight up to 50 gms per customer
• fixed deposits of other Banks

Q.18:- What is the priority of payment to workmen dues in case of liquidation?

• Pari passu with secured creditors and insolvency costs
• Pari passu with financial creditors
• Pari passu with secured creditors and employees
• Pari passu with secured creditors

Q.19:- Can the creditors initiate SARFAESI action against the company?

• Yes, with the consent of the National Company Law Tribunal (NCLT).
• Yes, if they constitute more than 75% of the total financial debt.
• Yes, with the consent of the Liquidator
• No, they cannot.

Q.20:- In case one of the secured creditors realises its security interest and such realization is not sufficient to pay its outstanding debts, can he recover the balance amount?

• The balance amount will be paid at par with other secured creditors.
• The balance amount will be ignored.
• The Balance amount will be paid at par with unsecured creditors.
• The balance amount will be paid at par with dues to the Central Government and the State Government.

Q.21:- Which among the following is not an essential feature of IFRS converged IND ASs (Indian Accounting Standard

• measurement not based on time value of money
• Applicable to separate as well as consolidated financial statement
• disclosure of all relevant information and assumptions used
• Give more importance to concept of substance over form

Q.22:- ‘Wages’ under the Minimum Wages Act, 1948 includes

• contribution by employer to any pension fund
• house rent allowance
• travelling allowance
• value of house accommodation

Q.23:- “S4A” scheme of RBI stands for

• Scheme for Sustainable Structuring of Systemic Assets
• Scheme for Sustainable Structuring of Stressed Assets
• Scheme for Schematic Structuring of Systemic Assets
• Scheme for Schematic Structuring of Stressed Assets

Q.24:- Which of the following decides applications from the banks and financial institutions for recovery of debts due to them?

• Debt Recovery Tribunals
• Central Board for Direct Taxes
• Securities Appellate Tribunals
• Debt Recovery Appellate Tribunals

Q.25:- Which of the following agreements is not void?

• agreement in restraint of legal proceedings
• agreement in restraint of marriage
• agreement caused by undue influence
• agreement in restraint of trade

Q.26:- In the absence of any specific contract between the partners, a partner making, for the purposes of the business, any payment or advance beyond the amount of capital he has agreed to subscribe, is entitled to interest thereon at the rate of....% per annum.

• 4.5
• 5.0
• 4.0
• 6.0

Q.27:- Who ordinarily appoints registered valuers under the Companies Act, 2013?

• Board of Directors of the company
• Registrar of the Companies
• Audit committee of the Board
• Valuation committee of the Board

Q.28:- Which of the following regulates issue of securities and the non-payment of dividend by listed companies?

• Tribunal
• Securities and Exchange Board of India
• Registrar
• Central Government

Q.29:- As per report of the Bankruptcy Law Reforms Committee, which of the following is not an objective of an insolvency and bankruptcy regime?

• Higher levels of debt financing
• Low time to resolution
• Lower levels of equity financing
• Low time loss in recovery

Q.30:- Which of the following is not eligible to be registered as an insolvency professional entity?

• a trust where majority of trustees are insolvency professionals
• a company where majority of whole time directors are insolvency professionals
• a limited liability partnership firm where majority of partners are insolvency professionals
• a partnership firm where majority of partners are insolvency professionals

Q.31:- In case of an application for enrollment of a professional member has some deficiency, the insolvency professional agency may.......

• refer the application to the National Company Law Tribunal.
• reject the application and ask for fresh application.
• refer the application with its recommendation to the Insolvency and Bankruptcy Board of India.
• give an opportunity to the applicant to remove the deficiency.

Q.32:- The governing board of an insolvency professional agency may amend its bye-laws by a resolution passed by votes being not less than ... times the number of votes, if any, cast against the resolution.

• 3
• 2
• 5
• 4

Q.33:- A person proposed to be registered as an insolvency professional agency must have a minimum net worth of

• Rs.2 crore.
• Rs.5 crore.
• Rs.l crore.
• Rs. 10 crore.

Q.34:- Which of the following is true about sale of assets by a resolution professional during the corporate insolvency resolution process?

• The resolution professional can sell unencumbered assets, not exceeding 10% of the claims admitted, with the approval of committee of creditors.
• The resolution professional can sell only unencumbered assets with the approval of the committee of creditors.
• The resolution professional cannot sell any asset.
• The resolution professional can sell any asset with the approval of the committee of creditors.

Q.35:- Which of the following cannot be used by a financial creditor to prove existence of a debt under corporate insolvency resolution process?

• a contract for the supply of goods and services with corporate debtor.
• the records available with an information utility.
• an order of a court or tribunal that has adjudicated upon the non­ payment of a debt.
• a financial contract supported by financial statements as evidence of the debt.

Q.36:- A corporate applicant shall send a copy of the application in Form 6 appended to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 to the registered office of the Corporate debtor by

• E-mail
• Speed post
• By hand
• Courier

Q.37:- A financial creditor needs to file an application for initiation of corporate insolvency resolution process in Form appended to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.

• Form 3
• Form 2
• Form 4
• Form 1

Q.38:- An appeal from an order of the Debt Recovery Tribunal may be filed before

• Debt Recovery Appellate Tribunal.
• High Court having jurisdiction.
• Insolvency and Bankruptcy Board of India.
• Supreme Court.

Q.39:- The term of the office of Chairperson of the Insolvency and Bankruptcy Board of India is

• 5 years or till he attains the age of 60 years, whichever is earlier.
• 5 years
• 3 years
• 5 years or till he attains the age of 65 years, whichever is earlier.

Q.40:- An Information Utility is not obliged to.................

• publish statistical information.
• create and store financial information
• register entities who can access its database.
• accept electronic submissions of financial information.

Q.41:- Who shall prepare the list of creditors after the passing of the bankruptcy order?

• Insolvency Professional Entity
• Bankruptcy trustee
• Information Utility
• Adjudicating Authority

Q.42:- Repayment plan has to be approved by....................

• 3/4th in value of the creditors.
• a majority of creditors.
• 3/4th of the creditors present in person or by proxy.
• 3/4th in value of the creditors present in person or by proxy.

Q.43:- Debts owed to a secured creditor in the event such secured creditor has relinquished security ranks equally with -

• Wages and any unpaid dues owed to employees other than workmen for the period of twelve months preceding the liquidation commencement date
• Insolvency resolution process costs.
• Dues to Central Government
• Workmen’s dues for a period of 24 months prior to liquidation commencement date

Q.44:- Under which of the following circumstances, liquidation may not commence under the Insolvency and Bankruptcy Code, 2016?

• The resolution plan approved by the adjudicating authority is contravened by the corporate debtor.
• Non-receipt of a resolution plan during the insolvency resolution period.
• The committee of creditors decides to liquidate the corporate debtor before confirmation of a resolution plan.
• The resolution plan approved by the adjudicating authority is contravened by a financial creditor.

Q.45:- Which one of the following is a pre-requisite for the preparation of a resolution plan?

• Vetting of default from at least one information utility.
• Formation of Committee of Creditors.
• Receipt of resolution plan(s) from financial creditors of the corporate debtor.
• Valuation of liquidation estate by at least three registered valuers.

Q.46:- The Adjudicating Authority shall appoint an Interim Resolution Professional withindays of the insolvency commencement date.

• 21
• 07
• 28
• 14

Q.47:- Under the code of conduct, an insolvency professional is not obliged to

• submit a copy of the records of every proceeding before the Adjudicating Authority to the Insolvency and bankruptcy Board of India
• take reasonable care and diligence while performing his duties.
• his comply with all requirements and terms and conditions of admission to the insolvency professional entity.
• his comply with all requirements and terms and conditions of admission to the insolvency professional agency.

Q.48:- Who makes model bye-laws to be adopted by Insolvency Professional Agencies?

• Ministry of Corporate Affairs
• Insolvency and Bankruptcy Board of India
• Governing Board of the Insolvency Professional Agency
• National Company Law Tribunal

Q.49:- Is an operational creditor desirous of initiating a corporate insolvency resolution process needs to deliver to the corporate debtor a demand notice in Form appended to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016?

• Form 1
• Form 2
• Form 6
• Form 3

Q.50:- A corporate applicant is required to obtain a written communication in Form 2 appended to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 from the proposed interim resolution professional stating that he

• agrees to accept the appointment subject to certain conditions.
• agrees to accept the appointment.
• agrees to accept the appointment jointly with another insolvency professional.
• refuses to accept the appointment.