Model Question Paper (w.e.f. 1st November, 2018) Part-01

Q.1:- Which of the following is not a function of an Insolvency Professional Agency?

• Register the insolvency professionals who are its members
• Monitor the performance of its members
• Lay down standards of professional conduct for its members
• Redress the grievances against insolvency professionals who are its members

Q.2:- . An officer of a corporate debtor is liable for punishment under Section 68 of the Insolvency and Bankruptcy Code, 2016, if he has, within the twelve months immediately preceding the insolvency commencement date or at any time after the insolvency commencement date, concealed any property of the corporate debtor exceeding a threshold amount. Who may initiate proceedings for such concealment and before which forum?

• IBBI; National Company Law Tribunal
• Central Government; Sessions Court
• Central Government; National Company Law Tribunal
• IBBI; Special Court under the Companies Act, 2013

Q.3:- An operational creditor is required to dispatch the application filed with the National Company Law Tribunal for initiation of corporate insolvency resolution to.

• the corporate debtor
• all financial creditors
• prospective resolution applicants
• the proposed interim resolution professional

Q.4:- Where all financial creditors are related parties of the corporate debtor, the committee of creditors shall comprise of.

• insolvency resolution professional and authorised representative
• all debenture holders
• 18 largest operational creditors by value and one representative each of workmen and of employees
• Top ‘n’ operational creditors accounting for 75% of voting share

Q.5:- Which of the following statements is not true about disposal of a show-cause notice issued to an insolvency professional agency?

• The Disciplinary Committee disposes of the show-cause notice by a reasoned order in adherence to principles of natural justice.
• The order in disposal of show-cause notice becomes effective on the day of receipt of the order by the insolvency professional agency.
• The Disciplinary Committee endeavours to dispose of the show­ cause notice within a period of six months of the assignment.
• The order in disposal of show-cause notice becomes effective ordinarily after thirty days of the date of issue of order.

Q.6:- Which of the following is not prohibited by the code of conduct for insolvency professionals?

• Accepting gifts or hospitality from a creditor
• Negligence while performing his functions and duties.
• Conducting business which in the opinion of the IBBI is inconsistent with the reputation of the profession.
• Taking support services from an insolvency professional entity

Q.7:- In which of the following circumstances voluntary liquidation is permissible?

• Where the company has no debt or can pay all its debts in full.
• Where the committee of creditors decides to liquidate the company during the resolution period.
• Where there is a financial debt arising out of default in payment of counter- indemnity obligation in respect of the guarantee.
• Where the Adjudicating Authority does not receive a resolution plan of a company

Q.8:- An information utility holds financial information as a.

• custodian
• trustee
• fiduciary
• regulator

Q.9:- When a complaint and grievance is in the same matter, it will fall within the category of.

• complaint-cum-grievance
• complaint
• grievance
• general complaint

Q.10:- Financial statement of a company does not include ______________.

• cash flow statement
• due and drawn statement
• profit and loss account
• balance sheet

Q.11:- Can a member function as a Bench of the National Company Law Tribunal?

• Yes, only in exigencies when no other member is available.
• Yes, a technical member, if duly authorised.
• No, a member cannot function as a Bench.
• Yes, a judicial member, if duly authorised.

Q.12:- Every limited liability partnership shall file a duly authenticated with the Registrar within sixty days of closure of its financial year.

• Cash Flow Statement
• Profit and Loss Statement
• Annual Return
• Auditor’s Report

Q.13:- Under the Sale of Goods Act, 1930, ‘delivery’ means.

• voluntary transfer of possession from one person to another
• gratuitous transfer of possession from one person to another
• transfer of possession irrespective of whether it is gratuitous, involuntary or voluntary, from one person to another.
• involuntary transfer of possession from one person to another

Q.14:- A suit for recovery of possession can be filed under the Specific Relief Act, 1963,.

• for movable property only
• for immovable property only
• for both immovable and movable property
• only by the owner in respect of property to which he has rightful title

Q.15:- As per the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, what constitutes a ‘non­ performing asset’?

• An account for which a borrower has refused to repay.
• An asset of a borrower which has been classified by a credit rating agency as doubtful.
• An asset of borrower’s subsidiaries company which has failed to repay any of its debt.
• An asset or an account of a borrower which has been classified by a bank as sub-standard or doubtful or loss asset.

Q.16:- In computing the period of limitation of any suit for the execution of a decree, the institution or execution of which has been stayed by injunction or order, the time of the continuance of the injunction or order from the day on which it was shall be excluded.

• heard first
• issued
• admitted
• filed

Q.17:- Exchange markets and Over Counter Markets are considered as two types of……………….:

• Secondary market
• Inter market
• Risky market
• Primary market

Q.18:- Which of the following is not settlement machinery appointed by the appropriate authority for the settlement of the industrial disputes under the Industrial Disputes Act, 1947?

• Labour Courts
• Courts of Inquiry
• Board of Arbitrators
• Conciliation officers

Q.19:- The listed entity (which has listed its specified securities) shall submit standalone financial results to the stock exchange within days of end of each quarter.

• Quarterly and year-to-date; 30
• Quarterly and year-to-date; 45
• Half-yearly and year-to-date; 45
• Half-yearly or quarterly or year-to-date; 30

Q.20:- How is cash management different than liquidity management?

• Cash management only considers cash, while liquidity management considers assets that are considered liquid.
• Cash management deals with only one account, while liquidity management involves everything on the balance sheet.
• Cash management is essential to financial reporting, while liquidity management is just a good practice.
• Cash management only considers the current financial reporting period, while liquidity management looks out 2-3 years.

Q.21:- The Supreme Court in Mobilox Innovations(P) Limited vs. Kirusa Software (P) Limited CA No. 9405 of 2017, has interpreted the expression (C) …………….„

• Doctrine of Repugnancy
• Operational Creditor
• Time value of money
• Existence of Dispute

Q.22:- In the case of Era Infra Engineering Ltd. vs. Prideco Commercial Projects Pvt. Ltd. (Company Appeal (AT) (Insolvency) No. 31 of 2017), the NCLAT held that in case no notice was issued by the Operational Creditor under Section 8 of the Insolvency and Bankruptcy Code, 2016 then

• the application under Section 9 of the Insolvency and Bankruptcy Code, 2016 is admitted however no moratorium is declared
• the application under Section 9 of the Insolvency and Bankruptcy Code, 2016 is dismissed however the moratorium on the corporate debtor can be declared
• the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, is provisionally admitted
• the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, stands dismissed being incomplete

Q.23:- In the case which of the following is incorrect?

• The bankruptcy process is automatically initiated with the rejection of repayment plan, without requiring any application
• Mr. M can make an application for bankruptcy
• The order of Adjudicating Authority rejecting the repayment plan is to be provided to the Insolvency and Bankruptcy Board of India for record.
• The employees can make an application for bankruptcy

Q.24:- During the course of liquidation, it was found that XYZ had gifted some assets of the company to another company DEF Ltd on 20th April 2015 and F l reported the transaction to the National Company Law Tribunal by way of an application. The National Company Law Tribunal may pass an order:

• Require any person to pay sums in respect of benefits received by such person to the liquidator;
• Rejecting the application;
• Require any person to submit relevant documents of transaction to the Insolvency and Bankruptcy Board of India to make necessary order.
• Requiring the Insolvency and Bankruptcy Board to initiate disciplinary proceedings against the liquidator;

Q.25:- In terms of the moratorium order, the following shall not be prohibited:

• Supply of raw material essential for laying down the roads
• Foreclosing of security interest created by XYZ in respect of its property
• Recovery of a property by a lessor where such property is occupied by XYZ
• Institution of arbitration proceedings

Q.26:- Which of the following enactments was not amended as part of the Insolvency and Bankruptcy Code, 2016?

• The Payment and Settlement Systems Act, 2007
• The Customs Act, 1962
• The Limited Liability Partnership Act, 2008
• The Limitation Act, 1963

Q.27:- Where the Committee of Creditors resolves to continue the interim resolution professional as resolution professional under section 22 of the Insolvency and Bankruptcy Code, 2016, the resolution needs to be passed a majority of not less than _______________ percent of voting share of the financial creditors.

• 90
• 75
• 66
• 50

Q.28:- The liquidator is required to communicate his decision of admission or rejection of the claim under section 14 of the Insolvency and Bankruptcy Code, 2016 Insolvency and Bankruptcy Code, 2016 to.

• the adjudicating authority and the creditor concerned
• all creditors and the Insolvency and Bankruptcy Board of India
• the creditor concerned and the corporate debtor
• the corporate debtor and the adjudicating authority

Q.29:- Under the Insolvency and Bankruptcy Code, 2016, may make an application for avoidance of transactions to, if the terms of such transaction required exorbitant payments to be made by

• Corporate Debtor; National Company Law Tribunal; Corporate Debtor
• Financial Creditor; IBBI; Liquidator
• Resolution Professional; Adjudicating Authority; Corporate Debtor
• Committee of Creditors; Special Court; Corporate Debtor

Q.30:- A creditor cannot apply in relation to any partnership debt owed to him for initiating an insolvency resolution process against.

• all partners of the firm
• the firm
• guarantor of the firm
• any one partner of the firm

Q.31:- Who prepares a list of creditors of the bankrupt under Section 132 of the Insolvency and Bankruptcy Code, 2016?

• Bankrupt
• Bankruptcy Trustee
• Adjudicating Authority
• Official Liquidator

Q.32:- In a bankruptcy process, unsecured creditors rank.

• in ascending order of the period of default of the debt
• in ascending order of the amount of debt due to them
• equally amongst themselves
• in descending order of the amount of debt due to them

Q.33:- Which of the following members of the Insolvency and Bankruptcy Board of India may be included as Members of the Disciplinary Committee?

• Executive members
• Nominee members
• Independent members
• Whole-time members

Q.34:- Provisions of which legislation applies to the proceedings before the Special Court under the Insolvency and Bankruptcy Code, 2016?

• The Indian Financial Code, 2013
• The Code of Criminal Procedure, 1973
• The Summary Trial of Offences Act, 1999
• The Code of Civil Procedure, 1908

Q.35:- Which of the following is not a requirement for a company to be registered as an insolvency professional agency?

• It is not under the control of person(s) resident outside India
• It is promoted by a statutory regulator.
• It has a minimum net worth of ten crore rupees.
• Its sole object is to carry out the functions of an insolvency professional agency.

Q.36:- Who amongst the following is eligible for registration as an insolvency professional?

• A graduate with 10 years of managerial experience
• A banker with 15 years of professional experience
• An advocate with 10 years of professional experience
• An MBA with 10 years of managerial experience

Q.37:- Which of the following may not prove existence of debt due to an operational creditor under the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016?

• A contract for the supply of goods and service.
• Records available with an information utility
• An invoice demanding payment for the goods and services supplied
• A charge registered with Registrar of Companies

Q.38:- Which of the following is not a requirement for registration as an information utility?

• Its sole object is to provide core services and other services under the Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017.
• More than half of its directors are independent Directors.
• At least 26% of its voting power is held by persons resident outside India.
• It has a minimum net worth of Rs.50 crore.

Q.39:- A show-cause notice issued by the Insolvency and Bankruptcy Board of India on consideration of an inspection report needs to be disposed of by within.

• IBBI; three months
• Inspecting Authority; Six months
• Disciplinary Committee; Six months
• Adjudicating Authority; One year

Q.40:- Who among the following need not be given notice for the general meeting of a company?

• a member of the company
• a debenture holder of the company
• an assignee of an insolvent member of the company
• the auditor of the company

Q.41:- Mr. X, a partner of a limited liability partnership defrauded creditors of the limited liability partnership for fraudulent purpose. The liability of the limited liability partnership.

• shall be nil, as all the liability will be that of Mr. X
• shall be unlimited
• shall be limited
• shall be limited, but the rest of liability will be that of Mr. X

Q.42:- A contract in which one person promises to compensate the other person for the loss suffered by him, due to the conduct of the promisor or of any other person, is known as______________.

• contingent contract
• quasi-contract
• contract of guarantee
• contract of indemnity

Q.43:- ‘A’ transfers a garden to B for his life, with a proviso that, in case B cuts down a particular neem tree, the transfer shall cease to have any effect. B cuts down the tree. Decide the case in the light of the Transfer of Property Act, 1882.

• No such provision is made under the Transfer of Property Act, 1882.
• B loses his life interest in the garden.
• The transfer will become void-ab-initio.
• B does not lose his life interest in the garden.

Q.44:- Which of the following decides applications from the banks and financial institutions for recovery of debts due to them?

• Debt Recovery Tribunal
• Central Board of Direct Taxes
• Debt Recovery Appellate Tribunal
• Securities Appellate Tribunal

Q.45:- The arbitration agreement as defined in Section 7(2) of The Arbitration and Conciliation Act, 1996 maybe.

• in the form of an implied oral agreement.
• in form of contract and a separate agreement
• in form of contract and a written agreement
• in the form of an arbitration clause in a contract or in the form of a separate agreement

Q.46:- Which of the following is most appropriate for measuring a bond’s sensitivity to shaping risk?

• Median duration
• Modified duration
• Effective duration
• Key rate duration

Q.47:- The Policy Repo Rate is ______________the Reverse Repo rate.

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

Q.48:- The balance sheet of a company does not reflect………………:

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

Q.49:- A firm can enhance its value by

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

Q.50:- The process whereby a company sells its receivables to a collection agent in order to secure a cash sum which is at a discount to the face value of the receivables is termed as ______________process.

• sell per se
• credit factoring
• debt factoring
• cash collection