Insolvency Professional Agency of Institute of Cost Accountants of India

Mock Test 3 – Limited Insolvency Examination

1. Which Legislations are getting repealed on enforcement of IBC?

a) The Presidency Towns Insolvency Act 1909, Provincial Insolvency Act 1920
and Sick Industrial Companies (Special Provisions) Act 1985.
b) Sick Industrial Companies (Special Provisions) Act 1985, The Securitisation
and Reconstruction of Financial Assets and Enforcement of Security Interest
Act 2002 and The Payment and Settlement Systems Act 2007.
c) Provincial Insolvency Act 1920, The Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act 2002 and Recovery
of Debts due to Banks and Financial Institutors Act, 1993.
d) Sick Industrial Companies (Special Provisions) Act 1985 and some provisions
of Negotiable Instruments Act, 1881.

2.What is Debt under the IBC?

(a) Debt means a liability or obligation in respect of a claim which is due from any
person
(b) It includes a financial debt and operational debt
(c) Both (a) & (b)
(d) None of the above
3.Who is an ‘Operational Creditor’ under IBC:
(a) A creditor whose liability subsists up to 6 months and is listed in the balance sheet.
(b) A person to whom an operational debt is owed and includes any person to whom
such debt has been legally assigned or transferred.
(c) Any creditor listed in the balance sheet of the corporate debtor.
(d) Any person that has advanced loan to another party.

4. Which of the following is not included as a Creditor under IBC?

(a) Financial creditor
(b) Secured creditor
(c) Operational creditor
(d) None of the above

5.Which of the following is not a Financial service under the Code:

(a) Accepting of Deposits
(b) Maintaining or Transferring records of Ownership of a Financial Product
(c) Effecting contracts of Insurance
(d) None of the Above
6. Whether IBC is applicable to person resident outside India:
a) No, IBC is not applicable to a person resident outside India.
b) Yes, IBC is applicable to a person resident outside India.
c) IBC is applicable to a person outside India with the prior approval of the Board.
d) IBC is applicable to person resident outside India as well as to foreign persons.
7. What is insolvency commencement date:
a) The date on which a financial creditor, corporate applicant or operational creditor
makes an application to the Adjudicating Authority for initiating corporate
insolvency resolution process.
b) The date of admission of an application by a financial creditor, corporate applicant
or operational creditor for initiating corporate insolvency resolution process by
the Adjudicating Authority.
c) The date on which a financial creditor, corporate applicant or operational creditor
realises the insolvent status of the corporate debtor.
d) The date on which the corporate debtor is unable to pay its debts to the creditors.
8. Who is an applicant under Section 7 of IBC:
a) Corporate Debtor.
b) Financial Creditor.
c) Operational Creditor.
d) Adjudicating Authority.

9. Once the application is received, the adjudicating authority shall

confirm the existence of default within
(a)7 days
(b)14 days
(c)21 days
(d)None of the above

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

14.Financial Creditors can be represented in the meeting of the Committee of

Creditors by an Insolvency professional. In this case, the fee of the professional for
attending such meetings will be

(a)Borne by the Corporate debtor

(b)Recoverable from the corporate debtor
(c)Borne by the Creditor concerned
(d)Fixed by the Committee of creditors

15. What is resolution plan:

a) A plan proposed by the financial or operational creditor for insolvency resolution
of the corporate debtor as a going concern.
b) A plan proposed by the Adjudicating Authority creditor for insolvency resolution
of the corporate debtor as a going concern.
c) A plan proposed by resolution applicant for insolvency resolution of the corporate
debtor as a going concern.
d) A plan proposed by the corporate debtor themselves for insolvency resolution of
the corporate debtor as a going concern.

16.Who approves the resolution plan:

a) Committee of creditors.
b) Insolvency Professional.
c) Adjudicating Authority.
d) Insolvency and Bankruptcy Board of India.
17. When is the public announcement required to be made?
a) Within 3 days of appointment of interim resolution professional.
b) Within 3 days of initiating a corporate insolvency case.
c) Within 3 days of admission order given by the Adjudicating Authority.
 d) Within 3 days of confirmation of interim resolution professional as insolvency
professional.

18. What is the last date for submission of proof of claims?

a) Within 14 days of admission of the case by the Adjudicating Authority.
b) Within 14 days of appointment of the interim resolution professional.
c) Within 14 days of initiating a corporate insolvency case.
d) Within 14 days of non-payment of debt of the particular creditor.
19.Who shall determine the amount of claim due to a creditor?
a) Committee of creditors.
b) Resolution professional.
c) Adjudicating Authority.
d) Corporate debtor.
20. What shall be the date of valuation in case of debt in foreign currency?
a) Exchange rate as on the insolvency commencement date.
b) Exchange rate as on the date of formation of committee of creditors.
c) Exchange rate as on the date of public announcement.
d) Exchange rate as on the date of acceptance of claims.

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.

25.What is the timelines for submission of information memorandum by Resolution

Professional to each member of the committee?
a) Within 2 weeks of his appointment
b) Not later than fifty-fourth day from the Insolvency commencement date
c) Within 2 weeks of his appointment, but not later than fifty-fourth day from the
Insolvency commencement date, whichever is earlier
d) Within 3weeks of his appointment, but not later than fifty-fourth day from the
Insolvency
26. Which of the following details are not contained in the Information Memorandum?
a) Assets and liabilities with such description, as on the insolvency commencement
date, which are generally necessary for ascertaining their values.
b) Latest annual Financial statements
c) Particulars of a debt due from or to the corporate debtor with respect to related
parties
d) Names and addresses of the members or partners holding less than 1% stake in
the corporate debtor
27.Can an Adjudicating Authority order the liquidation of a corporate debtor before the
expiry of insolvency resolution process period?
a) No, an Adjudicating Authority cannot order the liquidation of a corporate debtor
before the expiry of insolvency resolution process period.
b) As per the discretion of the Adjudicating Authority
c) Yes, if the Adjudicating Authority reject the resolution plan
d) Yes, if the interim resolution professional does not constitute Committee of
Creditors
28. Within how many days from the date of commencement of liquidation, the Liquidator
shall consolidate the claims
a) 7 days
b) 14 days
c) 21 days
d) 30days
29.Within how many days of submission, a creditor can withdraw or vary his claim?
a) 7 days
b) 14 days
c) 21 days
 d) 30days
30.Who is the Adjudicating Authority for dealing with the liquidation matter of a Limited
Liability partnership?
a) Insolvency and Bankruptcy Board of India
b) National Company Law Tribunal
c) Delhi High Court
d) Company Law Board

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

62.An Insolvency Professional shall make a public announcement………………….

a) Not later than two days from the date of his appointment
b) Not later than three days from the date of his appointment
c) Not later than Four days from the date of his appointment
d) Not later than 7 days from the date of his appointment

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

72. What is the validity period of shelf prospectus?

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

83.The Disciplinary Committee shall endeavour to dispose of the show-cause notice on

an Insolvency Professional within a period of ________ months of the assignments.
a) 3
b) 9
c) 6
d) 12
84.PNB initiated Corporate Insolvency Resolution Process against Nirav Modi Pvt Ltd for
the default in the capacity of-
a) Corporate debtor
b) Operational debtor
c) Financial creditor
d) Resolution applicant
85.PNB through an agreement, assigned here the debt to the X trust. X trust filed the
petition for initiation of corporate Insolvency resolution process (CIRP) against Nirav
Modi Pvt Ltd. State the correct statement with respect to the competency of the X trust in
the filing of the petition in the above situation-
a) X Trust is not a competent applicant as per section 6 of the IBC.
b) X Trust is being authorized by the PNB to file an application.
c) X Trust in the capacity of financial creditor can file a valid petition.
d) None of the above.

86-90 (Case Study)

(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

90. What is the priority of payment to workmen dues in case of liquidation?

a) Pari passu with secured creditors and employees
b) Pari passu with secured creditors and insolvency costs
c) Pari passu with secured creditors
d) Pari passu with financial creditors
Answers Mock Test 3
1. (a) 31. (d) 61. (a)
2. (c) 32. (d) 62. (b)
3. (b) 33. (d) 63. (b)
4. (d) 34. (d) 64. (c)
5. (d) 35. (b) 65. (b)
6. (b) 36. (d) 66. (a)
7. (b) 37. (a) 67. (c)
8. (b) 38. (c) 68. (b)
9. (b) 39. (d) 69. (d)
10. (d) 40. (b) 70. (c)
11. (d) 41. (b) 71. (b)
12. (b) 42. (d) 72. (a)
13. (a) 43. (c) 73. (c)
14. (c) 44. (b) 74. (b)
15. (c) 45. (d) 75. (a)
16. (a) 46. (b) 76. (d)
17. (a) 47. (c) 77. (b)
18. (b) 48. (c) 78. (b)
19. (b) 49. (c) 79. (b)
20. (a) 50. (d) 80. (d)
21. (c) 51. (a) 81. (a)
22. (b) 52. (c) 82. (a)
23. (a) 53. (a) 83. (c)
24. (c) 54. (a) 84. (c)
25. (c) 55. (a) 85. (c)
26. (d) 56. (c) 86. (d)
27. (c) 57. (b) 87. (b)
28. (d) 58. (c) 88. (a)
29. (b) 59.(b) 89. (a)
30. (b) 60. (d) 90. (c)