Model Question Paper (w.e.f. 1st November, 2018) Part-02

Q.1:- Whether M could have applied for the fresh start process?

• No, as it is required to seek prior approval of the Insolvency and Bankruptcy Board of India
• Yes, before the National Company Law Tribunal
• No, MM is ineligible for applying for fresh start process
• Yes, before the Debt Recovery Tribunal

Q.2:- The NCLT rejected the resolution plan for want of compliance with the Insolvency and Bankruptcy Code accordingly, the proceeds from the sale of liquidation shall be distributed in the following order of priority:

• F 3 & F 2 (ranked equally) – F l – F 5 & F 4 (ranked equally)
• F 2 & F 5 (ranked equally) – F l – F 3 – F 4
• F 2 & F5 (ranked equally) – F 3 – F l – F 4
• F2 – F l - F3 - F4 & F5 (ranked equally)

Q.3:- P can take the following action without the approval of the committee of creditors:

• File application for avoidance of a preferential transactions
• Make changes in the appointment of B
• Raise interim finance
• Record change in the ownership interest of XYZ

Q.4:- In Kamineni Steel & Power India Pvt. Ltd. (CP(IB) No. 11/10/HDB/2017), it was argued that the resolution plan.

• included extortionate credit transactions
• did not reflect the interest of the operational creditors properly
• was presented by the promoters who were the wilful defaulters
• was not approved by 75% of the voting share of financial creditor

Q.5:- In Pratik Ramesh Chirania vs. Trinity Auto Components Ltd. M.A.544/2017 (CP No. 1032/I&BC/MB/MAH/2017), the Mumbai bench of NCLT opined that ‘satisfaction of Adjudicating Authority’ as mandated under Section 31(1) of the Insolvency and Bankruptcy Code, 2016 ……:

• is only subjective
• is objective as the parameters to exercise such satisfaction is clearly provided for under the provisions of the Insolvency and Bankruptcy Code, 2016
• can be sanctioned without judicial analysis
• can be subjective or objective or both

Q.6:- In the case of Sree Metaliks Limited and another vs. Union of India [W.P.7144 (W) of 2017, Cal] it was held by Calcutta High Court that ……………….:

• Section 7 of the Insolvency and Bankruptcy Code, 2016 unconstitutional
• the principles of natural justice is expressly ousted from Section 7 of the Insolvency and Bankruptcy Code, 2016
• the National Company Law Tribunal and National Company Law Appellate Tribunal have to adhere to the principles of natural justice barring exceptional circumstance
• Section 7 of the Insolvency and Bankruptcy Code, 2016 must be read with the Section 424 of the Companies Act, 2013

Q.7:- Who will pay GST on the business (in respect of which any tax, interest, or penalty is payable under CGST Act) carried on by a minor, or another incapacitated person on behalf of and for the benefit of such minor or another incapacitated person?

• Director
• Such businesses are exempted from paying GST
• Guardian
• Partner

Q.8:- Basic Earnings per Share (EPS) is calculated as

• (Net Profit - Preference Share Capital) /Average shares outstanding
• Net profit /total number of shares
• (Net Profit - Dividend) /Total shares outstanding
• (Net profit - preferred dividend)/weighted average number of outstanding shares

Q.9:- As per the Constitution of India, which of the following courts is not a ‘court of record’?

• The Supreme Court of India and High Courts.
• High Courts and District Courts
• District Court only.
• District Courts, High Courts and Supreme Court of India

Q.10:- Which of the following represents the standard of living in a country?

• Per capital income
• National Income
• Unemployment rate
• Poverty ratio

Q.11:- As per the SEBI (Delisting of Equity Shares) Regulations, 2009 delisting of which of the following is not permitted?

• convertible securities
• bonus shares
• convertible secusweat equity sharesrities
• authorised equity shares recognised by any stock exchange

Q.12:- The Hon’ble Supreme Court, in the matter of Mardia Chemicals Ltd. Vs. Union of India, held that the requirement of deposit of 75% of the amount claimed before entertaining an appeal (petition) under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest, 2002 is.

• a matter of executive prerogative and the court does not have the jurisdiction to interfere in such matters
• valid but in the interest of justice, the amount to be deposited should be reduced to 45%
• mandatory and must be complied with
• an arbitrary condition against all the canons of reasonableness

Q.13:- When an instrument has been lost, then as per the Negotiable Instrument Act, 1881, until the contrary is proved, it shall be presumed that it was…………:

• duly signed
• an expired instrument
• duly registered
• duly stamped

Q.14:- In terms of the Partnership Act, 1932 the partner of a firm where the partnership is at will may retire.

• without the consent of all the other partners
• with the consent of all the other partners
• by giving notice in writing to all the other partners of his intention to retire
• in accordance with an express agreement by the partners

Q.15:- A valid Agreement is one which.

• is written on a piece of paper and signed by the parties
• creates legal and social obligations on the parties
• creates legally binding rights and obligations on the parties to it
• creates only rights of a party

Q.16:- A company that has not been carrying on any business or operation, or has not made any significant accounting transaction during the last two financial years or has not filed financial statements and annual returns during the last two financial years is.

• a shelf company
• a dormant company
• an inactive company
• a company undergoing insolvency resolution process

Q.17:- When a company has failed to commence its business within one year of its incorporation,.

• it will be given a dormant status
• the registrar may strike off its name from the register of companies
• it will be referred to official liquidator
• its registration will be suspended

Q.18:- Par value of a share means.

• face value of the share
• the latest traded value of the share on the stock-exchange
• dividend value of the share
• fair market value of the share

Q.19:- An order of the Insolvency and Bankruptcy Board of India directing an inspecting authority to conduct an inspection of records of a service provider may not contain_____________.

• composition of inspecting authority
• scope of inspection
• timelines for conducting the inspection
• privileges of service provider

Q.20:- During a fast track process, the existence of dues in the case of workmen can be proved.

• by resolution professional
• individually or collectively
• collectively only
• individually only

Q.21:- The Annual Status Report indicating progress of the voluntary liquidation is not required to include the

• developments in any material litigation
• details of assets that are yet to be sold
• cost of realization of the assets
• distribution made to stakeholders

Q.22:- The option to sell the assets of a corporate debtor by means of private sale under the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 is not available to a liquidator if the asset is

• likely to deteriorate in value if not sold immediately
• perishable
• sold at a price higher than the reserve price of a failed auction
• sold at a price lower than the reserve price of a failed auction

Q.23:- Who ordinarily decides the fees payable to a liquidator under the IBBI (Liquidation Process) Regulations, 2016?

• Adjudicating Authority
• Committee of Creditors
• Insolvency and Bankruptcy Board of India
• Corporate Debtor

Q.24:- Who enrolls an individual as its professional member?

• Indian institute of Corporate Affairs
• Insolvency and Bankruptcy Board of India
• Registered Valuer Organisation
• An Insolvency Professional Agency

Q.25:- In case the resolution professional receives more than one resolution plan,

• he shall select all such plans that meet the requirements of the Insolvency and Bankruptcy Code, 2016 and present them for consideration of the Committee of Creditors
• he shall file an application under section 60(5) of the Insolvency and Bankruptcy Code, 2016 for directions
• he shall select the best plan for consideration of the Committee of Creditors
• he shall negotiate with the resolution applicant to improve their offer and then select the best plan for consideration of the Adjudicating Authority

Q.26:- In a Corporate Insolvency Resolution Process, if there are dues to numerous workmen of the Corporate Debtor.

• the resolution professional shall use an authorised representative to collect and consolidate all such claims
• all workmen must submit their claims individually
• an authorized representative may submit one claim with proof on behalf of all workmen
• the resolution professional shall announce dues as per Corporate Debtors’ records and invite applications for disputes, if any

Q.27:- A Debt Recovery Tribunal does not have jurisdiction to entertain

• a question of priorities arising out of insolvency of an individual debtor
• a claim made by or against a corporate debtor
• a suit or proceeding by or against an individual debtor
• a claim made by or against an individual debtor

Q.28:- An appeal may be filed to the Supreme Court against an order of the NCLAT on a question of arising out of such order.

• admissibility of evidence
• process
• fact
• law

Q.29:- Any information utility which is aggrieved by an order of the Insolvency and Bankruptcy Board of India may prefer an appeal to.

• Supreme Court
• High Court of competent jurisdiction
• National Company Law Appellate Tribunal
• National Company Law Tribunal

Q.30:- An onerous property that a bankruptcy trustee may disclaim does not include.

• a property that may give rise to a claim
• a readily saleable property
• an unprofitable contract
• an unsaleable property

Q.31:- In case a repayment plan comes to an end prematurely under Section 118 of the Insolvency and bankruptcy Code, 2016, the resolution professional shall submit a report to the Adjudicating Authority. Such report need not contain

• the reason for premature end of the repayment plan
• the receipts and payments made in pursuance of the repayment plan
• an application for initiation of bankruptcy of the person concerned
• the details of the creditors whose claims have not been fully satisfied

Q.32:- Which of the following is an ‘excluded asset’ for the purposes of Part III of the Insolvency and Bankruptcy Code, 2016 dealing with insolvency resolution and bankruptcy for individuals?

• Encumbered single dwelling unit of prescribed value
• Encumbered single dwelling unit irrespective of its value
• Unencumbered single dwelling unit irrespective of its value
• Unencumbered single dwelling unit of prescribed value

Q.33:- A corporate debtor shall be deemed to have given a preference at a relevant time under the Insolvency and Bankruptcy Code, 2016 if it is given to a during the period of years preceding the insolvency commencement date.

• related party; three years
• related party; two years
• unrelated party; three years
• unrelated party; two years

Q.34:- A resolution professional shall file an application to the adjudicating authority to extend the period of fast track resolution beyond days, if instructed to do so by a resolution passed at a meeting of the committee of creditors.

• 270
• 180
• 90
• 45

Q.35:- The management of the affairs of a corporate debtor undergoing corporate insolvency resolution process vests in the.

• Board of Directors
• Interim Resolution Professional
• Insolvency and Bankruptcy Board of India
• Committee of Creditors