Mock Test 3
Mock Test 3
10. Which of the following activities shall not be prohibited or terminated during the
moratorium period:
a) Transferring, encumbering, alienating or disposing of any assets by the corporate
debtor.
b) The recovery of any property by an owner or lessor where such property is
occupied by oygr in the possession of the corporate debtor.
c) any action to foreclose, recover or enforce any security interest created by the
corporate debtor.
d) The supply of essential goods or services to the corporate debtor.
11.The duties of the Interim resolution professional under the Corporate Insolvency
resolution process include to take control and custody of any asset over which the
corporate debtor has ownership rights but not the following
(a)Assets in India and Assets abroad
(b)Tangible and intangible assets
(c)Assets in possession and not in possession of the corporate debtor
(d)Assets of the Indian or foreign subsidiary of the corporate debtor
12.What is the time limit within which the first meeting of committee of creditors should
be held:
a) Within 14 days of constitution of committee.
b) Within 7 days of constitution of committee.
c) Within 10 days of constitution of committee.
d) As per the discretion of the committee.
13.Which of the following agenda items should be taken up in the first meeting of
committee of creditors:
a) Appointment of interim resolution professional as insolvency professional or to
replacement of the interim resolution professional by another resolution
professional.
b) Preparation of draft resolution plan.
c) Discussion of the status of the corporate debtor as on the present date and the
road map ahead.
d) Collection of information on corporate debtor from independent sources
21. Which of the following statements relating to video conferencing with regard to due
and reasonable care to be taken by the resolution professional is not correct?
a) to safeguard the integrity of the meeting by ensuring sufficient security and
identification procedures.
b) to ensure that participants attending the meeting are able to hear and see, if
applicable, clearly during the course of the meeting
c) to ensure that every person including the intended participants has access to the
proceedings of the meeting through video conferencing or other audio and visual
means.
d) to store for safekeeping and marking the physical recording(s) or other electronic
recording mechanism as part of the records of the corporate debtor.
22. Who shall act as the Chairperson of the meeting of committee?
a) Insolvency Resolution Professional
b) Resolution Professional
c) IBBI
d) Adjudicating Authority
23. If the estimate of liquidation value of two registered valuers are different, then the
resolution professional shall?
a) Appoint another registered valuer who shall submit an estimate computed in the
same manner.
b) The average of the two closest estimates shall be considered.
c) Forward the values to the committee of creditors for adoption of a single value.
d) Reject the values and ask for fresh valuation figure.
24. Which of the following is true about sale of assets by a resolution professional during
corporate insolvency resolution process?
a) The resolution professional can sell any asset with the approval of the
committee of creditors.
b) The resolution professional can sell only unencumbered assets with the
approval of the committee of creditors.
c) The resolution professional can sell unencumbered assets, not exceeding 10%
of the claims admitted, with the approval of committee of creditors.
d) The resolution professional cannot sell any asset.
31. Can an Adjudicating Authority order the liquidation of a corporate debtor even after
approving the resolution plan?
a) Yes, if the resolution plan is contravened
b) The Adjudicating Authority may order the liquidation of a corporate debtor even
after approving the resolution plan on receiving an application from a third party
who is unaffected by such liquidation
c) Yes, the Adjudicating Authority may order for the liquidation of a corporate
debtor if the committee of creditor does not approve the resolution plan after its
approval by the Adjudicating Authority
d) No, the Adjudicating Authority cannot order the liquidation of a corporate debtor
after approving the resolution plan
32. Under which situation can an Adjudicating Authority replace the resolution
professional from getting appointed as liquidator:
a) When resolution plan has failed to meet the requirements and has been rejected
by the Adjudicating Authority
b) When resolution plan is not approved by the committee of creditors of corporate
debtor
c) When Board of the corporate debtor recommends the replacement after
approval of resolution plan by Adjudicating Authority
d) When IBBI recommends replacement without any reason to be recorded in
writing
33. Can IBBI recommend the replacement of a liquidator in a liquidation process of
corporate debtor:
a) No, IBBI cannot recommend the replacement of a liquidator in a liquidation
process of corporate debtor
b) Only in those cases which are transferred from BIFR
c) Only in cases where the Board has appointed the Interim Resolution Professional
d) Yes, IBBI can recommend the replacement of a liquidator by recording the reasons
in writing and intimating to Adjudicating Authority
34.Which of the following assets are not included in the liquidation estate:
a) assets subject to the determination of ownership by the court or authority
b) any asset of the corporate debtor in respect of which a secured creditor has
relinquished security interest
c) Intangible assets including but not limited to intellectual property, securities and
financial instruments, insurance policies, contractual rights
d) assets in security collateral held by financial service providers and are subject to
netting and set-off in multi-lateral trading or clearing transactions.
35. Which of the following assets are not included in the liquidation estate:
a) tangible assets, whether movable or immovable
b) contractual arrangements which do not stipulate transfer of title but only use of
the assets
c) assets that may or may not be in possession of the corporate debtor including but
not limited to encumbered assets
d) assets subject to the determination of ownership by the court or authority
36.Which of the following transaction shall not be deemed to be a preferential
transaction:
a) transfer of property or an interest thereof of the corporate debtor for the benefit
of a creditor or a surety or a guarantor for or on account of an antecedent financial
debt or other liabilities owed by the corporate debtor
b) transfer of property or an interest thereof of the corporate debtor for the benefit
of a creditor or a surety or a guarantor for or on account of an antecedent
operational debt or other liabilities owed by the corporate debtor
c) transfer of property or an interest thereof of the corporate debtor for the benefit
of a creditor or a surety or a guarantor for or on account of an antecedent financial
debt or operational debt or other liabilities owed by the corporate debtor having
the effect of putting such creditor or a surety or a guarantor in a beneficial
position than it would have been in the event of a distribution of assets being
made in accordance with section 53.
d) transfer made in the ordinary course of the business or financial affairs of the
corporate debtor or the transferee
37.A Declaration from Majority of Directors in Voluntary Liquidation shall not be
accompanied by
a) Audited Financial Statements
b) A report on valuation of assets prepared by registered valuer
c) Special resolution
d) Records of business operations of the Company for previous 2 years or since
incorporation, whichever is later
38.The Fast Track CIRP shall be completed within a period of ---------------- days from the
Insolvency commencement date?
a) 45
b) 75
c) 90
d) 120
39. What is the territorial jurisdiction in relation to insolvency resolution and liquidation
of corporate persons?
a) Place where the principal place of business of the corporate person is situated
b) Place where more than 50% of the activities of the corporate person is carried
out.
c) Place where the applicant resides
d) Place where the registered office of the corporate person is situated
40.What is the time limit within which the Adjudicating Authority has to accept or reject
the application:
a) 20 days from the date of receipt of the application
b) 7 days from the date of receipt of the application
c) 14 days from the date of receipt of the application
d) 30 days from the date of receipt of the application
41. What is the punishment for non-disclosure of dispute or repayment of debt by
operational creditor?
a) Imprisonment for a term not less than 2 years, extendable to 4 years or fine of
minimum Rs. 2 lakhs, extendable to Rs. 2 crore or both.
b) Imprisonment for a term not less than 1 year, extendable to 5 years or fine of
minimum Rs. 1 lakh, extendable to Rs. 1 crore or both.
c) Imprisonment for a term not less than 1 year, extendable to 4 years or fine of
minimum Rs. 3 lakhs, extendable to Rs. 3 crore or both.
d) Imprisonment for a term not less than 2 year, extendable to 4 years or fine of
minimum Rs. 4 lakhs, extendable to Rs. 4 crore or both.
42. Which of the following activities does not amount to concealment of property?
a) Where the officer of the corporate debtor fraudulently removed any part of the
property of the corporate debtor of the value of ten thousand rupees or more.
b) Where the officer of the corporate debtor wilfully concealed, destroyed, mutilated
or falsified any book or paper.
c) Where the officer of the corporate debtor wilfully made any false entry in any
book or paper.
d) Where the officer of the corporate debtor concealed a gift made to the corporate
debtor.
43.To whom shall the liquidator disclose the existence of any pecuniary or personal ships
with the corporate debtor?
a) IBBI
b) Adjudicating authority
c) Board and Adjudicating authority
d) National Company law Tribunal
44.Can an insolvency professional continue as a liquidator of a corporate debtor if
professional entity of which he is a partner is also representing interest of any
stakeholders of the corporate debtor in same liquidation process?
a) Yes, an insolvency professional can continue as a liquidator of a corporate debtor
in such case without prior approval from any authority
b) No, an insolvency professional cannot continue as a liquidator of a corporate
debtor in such case.
c) Yes, an insolvency professional can continue as a liquidator of a corporate debtor
in such case subject to prior approval from Insolvency and Bankruptcy Board of
India
d) Yes, an insolvency professional can continue as a liquidator of a corporate debtor
in such case
45. In what manner shall the liquidator make available the copy of reports prepared by
him in the course of liquidation of corporate debtor to the stakeholders?
a) Physical Manner
b) Physical Manner and Electronic Manner
c) Electronic Manner
d) Physical Manner or Electronic Manner
46. For how long shall the liquidator preserve the reports and minutes in the course of
liquidation of corporate debtor?
a) 5 years from the date of dissolution
b) 8 years from the date of dissolution.
c) On permanent basis.
d) 15 years from the date of dissolution
47. Within what time frame does the liquidator have to make an application to the
Adjudicating Authority with respect to onerous property of corporate debtor?
a) Within 1 month from liquidation commencement date
b) Within 3 months from liquidation commencement date
c) Within 6 months from liquidation commencement date
d) Within 9 months from liquidation commencement date
48. Liquidation cost does not include
a) costs incurred by the liquidator for preserving and protecting the assets,
properties, effects and actionable claims, including secured assets, of the
corporate debtor
b) costs incurred by the liquidator in carrying on the business of the corporate debtor
as a going concern
c) interest on interim finance for a period of Eighteen months or for the period from
the liquidation commencement date till repayment of interim finance, whichever
is lower;
d) any other cost incurred by the liquidator which is essential for completing the
liquidation process
49. Where shall the public announcement made by the liquidator be published?
a) Only in one English and one regional language newspaper
b) Only the website of the corporate debtor
c) One English and one regional language newspaper, on the website, if any, of
the corporate debtor and on website, if any designated by the board
d) On any website, if any, designated by National Company Law Tribunal
50.Within what time frame shall the liquidator submit Preliminary Report to the
Adjudicating Authority?
a) Within 25 days from the liquidation commencement date
b) Within 30 days from the liquidation commencement date
c) Within 60 days from the liquidation commencement date
d) Within 75 days from the liquidation commencement date
51. A person, who claims to be a stakeholder, shall submit its claim, or update its claim
submitted during the corporate insolvency resolution process on or before ………………….
a) the last date mentioned in the public announcement.
b) Liquidation commencement date
c) Date of submission of claim
d) Approval date by NCLT
52. In which form shall the Operational Creditor other than a workman or employee
submit his proof of claim to the liquidator under the liquidation process?
a) Form A of Schedule II
b) Form B of Schedule II
c) Form C of Schedule II
d) Form D of Schedule II
53. In which form a secured creditor shall inform the liquidator of its decision to
relinquish its security interest to the liquidation estate or realise its security interest?
a) Form C or Form D of Schedule II
b) Form A of Schedule II
c) Form B of Schedule II
d) Form E of Schedule II
54.Within how many days of liquidation commencement date a liquidator shall constitute
consultation committee?
a) Sixty days
b) Thirty days
c) Ninety days
d) One hundred twenty days
55. Who shall bear the cost of proving the claims under the liquidation process?
a) Claimant
b) Liquidator
c) Corporate Debtor
d) Creditors
56. What is the available time period with the liquidator for verification of claims?
a) within 7 days from the last date for receipt of claims
b) within 15 days from the last date for receipt of claims
c) within 30 days from the last date for receipt of claims
d) within 60 days from the last date for receipt of claims
57. Within what time period shall the liquidator intimate the creditors about the sale of
his secured assets?
a) within 7 days of receipt of intimation from the secured creditor
b) within 21 days of receipt of intimation from the secured creditor
c) within 30 days of receipt of intimation from the secured creditor
d) within 75 days of receipt of intimation from the secured creditor
58. In which bank shall the liquidator open a bank account of the corporate debtor under
the liquidation process?
a) Any Bank
b) Any Commercial Bank
c) Any Scheduled Bank
d) Any Nationalized Bank
59. An Operational 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.
a) Form 5
b) Form 3
c) Form 1
d) Form 6
60. An operational creditor shall pay a fee Rs…. along with an application for initiation of
corporate insolvency resolution process.
a) 25,000
b) 15,000
c) 5,000
d) 2,000
61. A Financial creditor shall pay a fee Rs…. along with an application for initiation of
corporate insolvency resolution process.
a) 25,000
b) 15,000
c) 5,000
d) 2,000
63.The Existence of debt due to the operational creditor under IBBI (Fast Track
Insolvency Resolution Process for Corporate Persons) Regulations, 2017 may not be
proved on the basis of
a) The records available with an Information Utility
b) A challan for supply of goods and services with corporate debtor
c) An invoice demanding payment for the goods and services supplied to the
corporate debtor
d) Financial accounts
64.The existence of debt due to the financial creditor may not be proved on the basis of
a) Records available with an information utility
b) A Financial contract supported by financial statements as evidence of debt
c) Financial accounts
d) An order of a court or tribunal that has adjudicated upon the non-payment of a
debt, if any
65. A creditor shall submit the proof of his claim
a) on date of public announcement
b) on or before the last date mentioned in public announcement
c) before the approval of resolution plan
d) before the date of admission of such claim
66.The verification of claims as on the fast track commencement date shall be done by
the IRP or RP within
a) seven days from the last date of the receipt of claims
b) ten days from the last date of the receipt of claims
c) immediately on receipt of claims
d) Fourteen days from the last date of the receipt of claims
67. When shall the registered valuers be appointed for conduct of Fast Track Process?
a) In the committee meeting
b) On the date of appointment of resolution Professional
c) Within seven days of appointment of Resolution Professional
d) Within Fourteen days of appointment of Resolution Professional
68.Who among the followings shall be appointed as registered valuers
a) Relative of resolution professional
b) A party not related to corporate Debtor
c) An auditor of the corporate debtor at any time during the five years preceding the
insolvency commencement date
d) A partner or director of the Insolvency professional entity of which the resolution
professional is a partner or director
69.The resolution professional may sell unencumbered assets of the corporate debtor,
other than in the ordinary course of business, if
a) It is fair
b) It is profitable
c) It is necessary for maintaining the corporate health
d) He is of the opinion that such sale is necessary for a better realisation of value
under the facts and circumstances of the case.
70. If the Fast track process cannot complete within the Prescribed time limit, then whom
shall the application be made by the Resolution professional for extension of time?
a) Committee meeting
b) IBBI
c) Adjudicating authority
d) All the above
71. A company shall at any time, vary the terms of a contract referred to in the prospectus
by ……………….in general meeting?
a) Ordinary resolution
b) Special Resolution
c) Approval of Board of Directors
d) None
a) 1year
b) 2years
c) 3years
d) 4years
73. For a charge to be duly considered by the liquidator or any other creditor, it ….
a) has to be duly registered.
b) must have a certificate of registration.
c) must be duly registered and have a certificate of registration.
d) need not be registered.
74. Within how many days of his appointment, the resolution professional shall examine
the application made under section 80
a) within 7 days
b) within 10 days
c) within 14 days
d) within 21 days
75.On which date the moratorium period shall start in case of a fresh start process?
a) Date of admission of application
b) Date of Commencement
c) Date of appointment of Resolution Professional
d) Date of submission of application
76. Which of the following is not a valid ground to suspend or cancel the certificate of
registration granted to an Information Utility?
a) If it has obtained registration by making a false statement.
b) If it has failed to comply with the requirements of the regulations made by the
Board.
c) If it has contravened any of the provisions of the Act or the rules or the
regulations.
d) If it was unable to provide the required information to the resolution professional
in stipulated time.
77. IBBI may grant or renew a certificate of registration to the applicant as an information
utility in which form?
a) Form A
b) Form B
c) Form C
d) Form D
78. How much fees are charged by Information Utility to provide an annual statement of
all information pertaining to the user
a) A Rs. 1000/- per annum
b) Free of cost
c) Rs. 2 per page
d) Rs. 5000/- per annum
79.Who has the authority to amend bye-laws of an Insolvency Professional Agency:
a) Insolvency Professional
b) Governing Board of Insolvency Professional Agency
c) Advisory Board of Insolvency Professional Agency
d) Shareholder of Insolvency Professional Agency
80.The Governing board of Insolvency Professional agencies shall have minimum ………….
directors
a) Three
b) Four
c) Five
d) Seven
81. No person shall be eligible for registration as an Insolvency Professional Agency
unless is a ………………….
a) Company Registered under section 8 of the Companies Act, 2013
b) Private company
c) Public Company
d) Government Company
82.Board shall within ________ days, after due process as it deems fit grant certificate of
Registration to the Insolvency Professional
a) 60
b) 45
c) 30
d) 15
(a) A Ltd. (Company) is engaged in the manufacturing of Sponge Iron, TMT bars and
Galvanized wires. It has availed various credit facilities from a total of 19 secured
creditors with an outstanding debt of Rs.1500 crore. Due to adverse market conditions,
its financial position took a downturn and hence it filed a reference with the Board for
Industrial and Financial Reconstruction (BIFR). The reference was duly registered.
During the proceedings before BIFR, one of the secured creditors, after taking consent of
the other creditors of the company, filed an application for abatement of the reference
before BIFR.
(b) Meanwhile, one of the unsecured creditors filed an application before BIFR for the
impleadment in the proceedings. The BIFR dismissed the said application due to non-
prosecution.
(c) Subsequently, upon coming into force of the Insolvency and Bankruptcy Code (IBC),
2016, the company filed an application for initiation of Corporate Insolvency Resolution
Process (CIRP) before National Company Law Tribunal (NCLT) on 09.12.2016. However,
in the first meeting of the Committee of Creditors held on 05.01.2017, the financial
creditors of the company decided to liquidate the company. Immediately after this
decision, but before intimating the decision to the NCLT, one of the financial creditors of
the company applied to Resolution Professional (RP) giving proof of his claim and seeking
his inclusion in the Committee of Creditors.
86. Can the creditors initiate SARFAESI action against the company?
a) Yes, if they constitute more than 75% of the total financial debt.
b) Yes, with the consent of the Liquidator.
c) Yes, with the consent of the National Company Law Tribunal (NCLT).
d) No, they cannot.
87. 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?
a) The balance amount will be ignored.
b) The balance amount will be paid at par with dues to the Central Government and the
State Government.
c) The balance amount will be paid at par with other secured creditors.
d) The Balance amount will be paid at par with unsecured creditors.
88. In case the liquidation process is initiated, the unsecured creditor who filed an
application before BIFR for impleadment shall be paid -----.
a) as per claim accepted by the liquidator in accordance with priorities specified in the
Insolvency and Bankruptcy Code, 2016.
b) as per the amount of its claim before BIFR.
c) as per the amount of its claim made before the liquidator.
d) as per the order of Debt Recovery Tribunal.
89. In case the secured creditor faces resistance from company for enforcement of
security interest, such secured creditor may apply to:
a) Adjudicating Authority
b) Debt Recovery Tribunal
c) Liquidator
d) High Court