Model Question Paper (31st December 2016 to 30th June 2017) Part-2

Q.1:- The public announcement regarding initiation of corporate insolvency resolution process may not be made

• on the website designated by the Insolvency and Bankruptcy Board of India.
• in newspapers.
• on the website of the Insolvency Professional Agency.
• on the website of the corporate debtor.

Q.2:- Who convenes the meeting of the committee of creditors?

• the resolution professional
• the financial creditor with the largest amount of claim
• the applicant
• the Managing Director of the Corporate Debtor

Q.3:- A debtor/creditor who provides false information in the insolvency resolution process of an individual invites a maximum punishment of

• imprisonment for one year or fine of Rs. 1 lakh or both.
• imprisonment for one year or fine of Rs.5 lakh or both.
• imprisonment for three years or fine of Rs. l lakh.
• imprisonment for three years or fine of Rs. l lakh or both.

Q.4:- What is the minimum punishment that may be imposed on a director of the corporate debtor who has undertaken a transaction after the insolvency commencement date to defraud the creditors?

• Imprisonment for three years or fine of Rs.5 lakh or both.
• Imprisonment for three years or fine of Rs.l lakh or both.
• Imprisonment for three years or fine of Rs. 1 lakh.
• Imprisonment for one year or fine of Rs.l lakh or both.

Q.5:- The Insolvency and Bankruptcy Board of India may order any person to act as investigating authority to conduct an investigation of....

• Insolvency Professional Agency.
• Committee of Creditors.
• Insolvency Professional Entity.
• Resolution Applicant.

Q.6:- The estate of the bankrupt shall vest in the bankruptcy trustee from the date of........

• appointment of bankruptcy trustee.
• acceptance of the bankruptcy application.
• issuance of public notice.
• passing of the bankruptcy order.

Q.7:- An application for bankruptcy by the debtor can be withdrawn with the leave of the

• National Company Law Appellate Tribunal.
• Insolvency and Bankruptcy Board of India.
• Committee of Creditors.
• Adjudicating Authority.

Q.8:- A debtor is eligible to apply for insolvency resolution process if he

• is an undischarged bankrupt.
• is undergoing a fresh start process.
• has not faced a previous insolvency resolution process during the period of twelve months preceding the date of submission of the application.
• is undergoing a bankruptcy process.

Q.9:- Which of the following is not a requirement of voluntary liquidation of a company under the Insolvency and Bankruptcy Code, 2016?

• Declaration from majority of Directors of the company to the effect that the company has no debt or it will be able to pay its debts in full.
• Declaration from majority of Directors of the company to the effect that the company is not being liquidated to defraud any person.
• Declaration of solvency by the members of the company.
• The company has not committed any default.

Q.10:- An application against the decision of the liquidator rejecting the claim of a creditor may be made to -

• the committee of creditors.
• the Insolvency and Bankruptcy Board of India.
• the Debt Recovery Tribunal.
• the National Company Law Tribunal.

Q.11:- Who cannot initiate a fast track corporate insolvency resolution process?

• corporate debtor
• financial creditor
• insolvency professional
• operational creditor

Q.12:- Can an interim resolution professional act as the resolution professional?

• Yes, if appointed by the committee of creditors with votes of not less than 75% of the creditors.
• No, as it involves conflict of interest.
• Yes, if appointed at a meeting of the committee of creditors with a majority of the creditors present and voting.
• Yes, if appointed by the committee of creditors with not less than 75% of the voting share of the creditors.

Q.13:- When can a bank initiate a corporate insolvency resolution process in relation to a corporate debtor?

• On net-worth of the debtor becoming negative.
• On determination of default by National Company Law Tribunal.
• On the bank classified the account as Non-Performing Asset.
• Occurrence of default.

Q.14:- A resolution applicant shall endeavor to submit the resolution plan

• by the time line set by the committee of creditors.
• within 30 days before the expiry of the maximum period permitted for corporate insolvency resolution process.
• by the timeline set by the resolution professional.
• within 30 days of the first meeting of committee of creditors.

Q.15:- In case the application for registration of an insolvency professional agency is having some defect, the Insolvency and Bankruptcy Board of India may:

• refer the application to National Company Law Tribunal.
• reject the application.
• Grant a provisional registration subject to correcting such defects.
• give additional time to the applicant to remove such defects.

Q.16:- The appeal against an order of the Insolvency and Bankruptcy Board of India suspending the registration granted to an insolvency professional agency may be preferred to

• High Court having jurisdiction
• National Company Law Tribunal
• Supreme Court
• National Company Law Appellate Tribunal

Q.17:- Which of these is not a mandatory committee to be formed by the governing board of an insolvency professional agency under the model bye­ laws?

• grievance redressal committee
• Risk management committee
• monitoring committee
• advisory committee

Q.18:- Where a professional member has committed an offence involving moral turpitude, the disciplinary committee of the insolvency professional agency may.

• Impose a monetary penalty.
• suspend the member.
• refer the matter to the Insolvency and Bankruptcy Board of India.
• expel the member.

Q.19:- The limited period registration granted to an insolvency professional is valid for months.

• 9
• 3
• 12
• 6

Q.20:- Remuneration charged by an insolvency professional need not be.

• lowest.
• transparent.
• disclosed to stakeholders.
• reasonable.

Q.21:- The Financial Sector Legislative Reforms Commission has proposed a ________which will intervene in the working of financial firms when they are distressed but still solvent.

• Insolvency resolution corporation
• Financial resolution corporation
• Business resolution corporation
• Resolution corporation

Q.22:- As per the Bankruptcy Law Reforms Committee, the process which discharges all debts if the assets and income of a debtor are under an amount specified by regulations is called

• insolvency resolution process
• earned start
• bankruptcy process
• automatic fresh start order

Q.23:- For a charge to be duly considered by the liquidator or any other creditor, it ________:

• must be duly registered and have a certificate of registration.
• has to be duly registered.
• need not be registered.
• must have a certificate of registration.

Q.24:- Which of the following matters requires a special resolution by a company?

• Acceptance of deposits
• Reducing share capital
• Appointment of a director
• Removal of a director

Q.25:- The President of the National Company Law Tribunal shall be a person who is or has been:

• a judge of a District Court for ten years
• a judge of a High Court for five years
• a senior advocate
• a judge of a High Court for three years

Q.26:- A Limited Liability Partnership firm shall have at least.... partners.

• 7
• 5
• 3
• 2

Q.27:- Which of the following is not a requirement of a contract?

• lawful object
• free consent of the parties
• a written agreement
• lawful consideration

Q.28:- A contract in which one person promises to compensate the other for the loss suffered by him, due to the conduct of the promisor or of any other person, is known as:

• Quasi-contract
• Contract of indemnity
• Contingent contract
• Contract of guarantee

Q.29:- A contract for present sale of future goods under the Sale of Goods Act, 1930 operates as a/an....

• estoppel
• contract of sale
• quasi contract of sale
• agreement to sell

Q.30:- B Ltd. has taken a loan from A Ltd. B Ltd. will not be considered as a ‘borrower’ under of the SARFAESI Act, 2002 in the event

• A Ltd. and B Ltd. are financial companies
• B Ltd. is a non-fmancial company
• A Ltd. and B Ltd. are non-fmancial companies
• A Ltd. is a financial company

Q.31:- The Hon’ble Supreme Court, through its order in the matter of Mardia Chemicals Ltd. Vs. Union of India, reduced the mandatory pre-deposit for filing securitization applications from 75% to%.

• 40
• 60
• 50
• 25

Q.32:- Government of India may borrow upon the security of the

• Public Account of India
• Consolidated Fund of India
• Fiscal Fund of India
• Contingency Fund of India

Q.33:- The Policy Repo Rate is -— the Reverse Repo rate.

• equal to
• higher than
• 75% of
• lower than

Q.34:- Which of the following is not true?

• An insolvency professional must refrain from accepting too many assignments.
• An insolvency professional must not engage in any employment.
• An insolvency professional must not accept more than one assignment from the same corporate applicant in a year.
• An insolvency professional must not accept gifts which undermines his independence

Q.35:- Basic Earnings per Share (EPS) is calculated by............

• net Profit - preference share capital)/Average number of shares outstanding
• net profit/total number of shares
• net Profit - dividend)/Total shares outstanding
• net profit -preferred dividend)/weighted average number of shares outstanding

Q.36:- A firm can enhance its value by..............

• decreasing cost of capital.
• increasing working capital.
• Increasing debt.
• increasing capital expenditure.

Q.37:- In case the liquidation process is initiated, the unsecured creditor who filed an application before BIFR for impleadment shall be paid--------- .

• as per the amount of its claim made before the liquidator.
• as per claim accepted by the liquidator in accordance with priorities specified in the Insolvency and Bankruptcy Code, 2016.
• as per the order of Debt Recovery Tribunal.
• as per the amount of its claim before BIFR.

Q.38:- In case the secured creditor faces resistance from company for enforcement of security interest, such secured creditor may apply to:

• Liquidator
• Adjudicating Authority
• High Court
• Debt Recovery Tribunal