1. Write a short note on ‘Fresh Start Process’ ?

फ्रेश स्टार्ट प्रोसेस’ वर एक छोर्ी नोर्

लिहा
1. The Part III of the Insolvency and Bankruptcy Code, 2016 deals with the insolvency
resolution and bankruptcy for individuals and partnership firms. The Part is further divided
into various chapter and each chapter deals with some different concept. The preliminary
chapter of the part talks about its applicability and various definitions used in order to
discharge functions under this part. This research article will be dealing with the concept
of fresh start process under this part. The Part III of the code, applies to matters relating to
fresh start, insolvency and bankruptcy of individuals and partnership firms where the
amount of the default is not less than one thousand rupees, provided that central government
by notification specify the minimum amount of default of higher value which shall not be
more than one lakh rupees.

Who can file for fresh start process

The concept of fresh start process is covered under Chapter II of Part III of the Code. The
chapter comprises of 14 sections which cover the whole process of filing of fresh start
process, how the resolution professional is appointed and how the discharge of order take
place under this process.

2. Mention any Five Objectives of the Insolvency and Bankruptcy Code, 2016 ?आई
. बी . सी. 2016 च्या कोणत्याही पाच उलिष्ाांचा उल्लेख करा.

The main objective of this Code is:

Consolidate and amend all existing insolvency laws in India.
To simplify and expedite the Insolvency and Bankruptcy Proceedings in India.
To protect the interest of creditors including stakeholders in a company.
To revive the company in a time-bound manner.
To promote entrepreneurship.
To get the necessary relief to the creditors and consequently increase the credit supply in the
economy.
To work out a new and timely recovery procedure to be adopted by the banks, financial
institutions or individuals.
To set up an Insolvency and Bankruptcy Board of India.
Maximization of the value of assets of corporate persons.

2. Write a short note on ‘Associate’ of the Debtor ?कर्टदार चा ‘सहकारी’ म्हणून

वर्गीकृत केिेल्या व्यक्ी ां ह्या वर एक छोर्ी नोर् लिहा.

3. “associate” of the debtor means –

(a) a person who belongs to the immediate family of the debtor;
(b) a person who is a relative of the debtor or a relative of the spouse of the debtor;
(c) a person who is in partnership with the debtor;
(d) a person who is a spouse or a relative of any person with whom the debtor is in
partnership;
(e) a person who is employer of the debtor or employee of the debtor;
(f) a person who is a trustee of a trust in which the beneficiaries of the trust include
a debtor, or the terms of the trust confer a power on the trustee which may be exercised
for the benefit of the debtor; and
(g) a company, where the debtor or the debtor along with his associates, own more
than fifty per cent. of the share capital of the company or control the appointment of the
board of directors of the company.
Explanation. - For the purposes of this sub-section, “relative”, with reference to any
person, means anyone who is related to another, if (i) they are members of a Hindu
Undivided Family;
(ii) one person is related to the other in such manner as may be prescribed;

3. Name any Five Functions of an ‘Insolvency Professional Agency’ as listed in

the Chapter III of the I.B.C ?आय.बी.सी. च्या {अध्याय III}च्या तरतु दीनु सार एक
सूचीबद्ध केिेल्या ‘लदवाळखोरी व्यावसालयक एर्न्सीच्या’ कोणत्याही पाच कायाांचा
उल्लेख करा.
Functions of an Insolvency Professional Agency
Following are the functions of Insolvency Professional Agency as specified in section 204 of
Insolvency Code (with effect from 15-11-2016):

Insolvency professional agency has the primary function of granting membership to insolvency
professionals.
These agencies frame the standard of professional conduct and ethics to the members enrolled
under them.
They protect the rights and privileges of the members and safeguard their interests
They also enquire the member’s grievances and take steps to resolve those.
The agency continuously monitors member’s performance and they can suspend/cancel
membership wherever and whenever required.

5. Write a Short note on the Organisational Structure of the Insolvency and

Bankruptcy Board of India ? भारतीय इन्सोिवेनसी अँ ड बांकरपर्सी बोडट च्या सांघर्नात्मक
सांरचने वर एक छोर्ी नोर् लिहा

5 One Chairperson.
Three members from Central Government officers not below the rank of Joint Secretary or
equivalent.
One nominated member from the RBI.
Five members nominated by the Central Government; of these, three shall be whole-time
members.

6. Mention any Three Duties and Three Rights of the Resolution Professional
?‘ररसोल्युशन प्रोफेशनि’ म्हणून वर्गीकृत केिेल्या व्यक्ी ांच्या कोणत्याही तीन कतट व्ये आलण तीन
अलिकाराांचा उल्लेख करा.

Duties and responsibilities of an Insolvency Professional

The duties of the IRP and RP are provided by the code under Section 18 and Section 25.

To preserve, protect and monitor the assets of the corporate debtor.

Collecting all the information of the assets, finances, and operations.
To invite the prospective resolution applicant fulfilling the criteria prescribed by the CoC.
Following the public announcement under section 13 and 15 to receive and collating of claims
that are submitted by the creditors.
Filling of information collected with the information utility.
To represent himself and act on the behalf of the corporate debtor.
To raise interim finances as per the limits prescribed by the CoC.

7. Write a short note on the Debt Recovery Appellate Tribunal कर्ट पुनप्राटप्ती अपीिीय
न्यायालिकरणावर एक नोर् लिहा

Debt Recovery Tribunals were established to make it easier for banks and other financial
institutions to recover debts owed to them quickly. DRTs were established when the Recovery
of Debts Due to Banks and Financial Institutions Act (RDBBFI) was passed in 1993. A person
or company who has been harmed by DRT orders can file an appeal with the Debt Recovery
Appellate Tribunal (DRAT). The DRAT will not consider the appeal unless the person pays 75
percent of the sum owing, as calculated by the DRT. The Debt Recovery Tribunal Act is
examined in-depth in this article DRT’s principal goal and purpose are to collect monies from
debtors that are owed to banks and financial organizations. The Tribunal’s jurisdiction is
confined to disputes involving the restoration of outstanding amounts from NPAs declared by
banks in accordance with RBI standards. All of the District Court’s powers are delegated to the
Tribunal. The Tribunal also employs a Recovery Officer who assists in the execution of the
Presiding Officers’ recovery certificates. DRT adheres to the legal process by emphasizing the
expeditious disposition of cases and the swift implementation of final orders.

181. (1) An appeal from an order of the Debt Recovery Tribunal under this Code shall be filed
within thirty days before the Debt Recovery Appellate Tribunal.

(2) The Debt Recovery Appellate Tribunal may, if it is satisfied that a person was prevented
by sufficient cause from filing an appeal within thirty days, allow the appeal to be filed within
a further period not exceeding fifteen days.

8. Write a short note on persons who can initiate the Corporate Insolvency
Resolution Process. र्ी व्यक्ी ‘कॉपोरे र् इन्सोिवे नसी रे सोिुशन प्रलिया’ ची सुरुवात करू
शकतात अशा व्यक्ी ांवर एक नोर् लिहा.
Initiation of CIRP
The financial creditor can initiate the CIRP against the corporate debtor by applying to NCLT.
The operational creditor should first give a demand notice of an unpaid invoice to the corporate
debtor demanding the default payment amount. When the operational creditor does not receive
payment from the corporate debtor after the expiry of ten days of delivery of the demand notice
or invoice demanding payment, he can apply to NCLT for initiating the CIRP.

A partner or member of the corporate debtor authorised to initiate CIRP or a person in charge
of managing the affairs or who has control and supervision over the financial affairs of the
corporate debtor can initiate the CIRP with NCLT.

NCLT will pass an order within fourteen days of either admitting or denying the CIRP
application. The CIRP will commence from the admission date of the application by NCLT.
The CIRP completion period is 180 days from the admission date of the CIRP application.

9. Mention any Three Advantages and Three Limitations of ‘Voluntary

Liquidation’ ? ‘व्हॉिूनर्े री लिकवीडे शन’ च्या कोणते ही तीन फायदे आलण तीन मयाटदाांचा
उल्लेख करा

Advantages
 Outstanding debts are written off.
 Legal action is halted.
 Staff can claim redundancy pay.
 Leases can be cancelled.
 Relatively low costs involved
 Avoid court processes.

Disadvantages

 Accusations of wrongful trading.

 Personal liability for company debts.
 Liability for overdrawn directors’ current accounts.
 All business assets will be sold.
  All staff will be made redundant.

10. Explain the concept of ‘secured creditors’? / ‘सुरलित िनको’ ची सांकल्पना स्पष् करा.

secured creditor is a “creditor in favor of whom security interest is created.’’ [i]The security
interest means right, title or interest or a claim to property, created in favour of, or provided for
a secured creditor by a transaction which secured the payment or performance of an obligation
includes:
Mortgage
Charge
Hypothecation
Assignment
Encumbrance
Or any other agreement or agreement of securing payment or performance of any obligation of
any person’’.[ii]

In simple terms, if the debt is secured by the mortgage of immovable property, hypothecation
of the stock, pledge of the shares or in any other form of encumbrance, the said debt is
considered as the secured debt and the creditors as the secured creditors. If the debtor failed to
meet the repayment obligation, the secured creditor may enforce the security interest and
recover the amounts due.

11. Who is judgment debtor? / ‘न्यायालनणीत ऋणको’ म्हणर्े काय?

a judgment debtor is a person against whom a judgment ordering him to pay a sum of money
has been obtained and remains unsatisfied. Such a person may be examined as to their assets,
and if the judgment debt is of the necessary amount he may be made bankrupt if he fails to
comply with a bankruptcy notice served on him by the judgment creditors.

12. Write notice on : Avoidance of voluntary Transfer / र्ीप लिहा – हस्ाांतरण वर्ज्ट
ठरलवणे
Whenever a person is declared as insolvent, certain transactions undertaken during the process
of insolvency or even before that are avoided to overturn their effects on the finances of the
corporate debtor. The provisions are generally called as 'avoidance provisions' and are present
in insolvency laws of almost all jurisdictions.
Following are the avoidable transaction.
Preferential Transaction
Undervalued Transaction
Extortionate Credit Transactions

13. Explain – Disqualification of Insolvent / स्पष् करा – लदवाळखोर व्यक्ीची अपात्रता

140-Disqualification of bankrupt.
W.e.f., 01.12.2019
(1) The bankrupt shall, from the bankruptcy commencement date, be subject to the
disqualifications mentioned in this section.

(2) In addition to any disqualification under any other law for the time being in force, a bankrupt
shall be disqualified from—

(a) being appointed or acting as a trustee or representative in respect of any trust, estate or
settlement;

(b) being appointed or acting as a public servant;

(c) being elected to any public office where the appointment to such office is by election; and

(d) being elected or sitting or voting as a member of any local authority.

(3) Any disqualification to which a bankrupt may be subject under this section shall cease to
have effect, if—

(a) the bankruptcy order against him is modified or recalled under section 142; or
(b) he is discharged under section 138.

Explanation.—For the purposes of this section, the term “public servant” shall have the same
meaning as assigned to it in section 21 of the Indian Penal Code.

14. Explain suits by indigent person / लनिटन व्यक्ीकडून होणारे दावे स्पष् करा.
Before filing a suit as an indigent person begins, it is important to add all the relevant contents
in the application seeking permission to be an indigent person [Rule 2]. As per Rule 2 of Order
XXXIII, the application must include the particulars similar to what is mentioned in the plaint
and all movable or immovable properties of the indigent person/applicant along with its
estimated value.

The indigent person/applicant shall himself in person present the application before the court.
In case, such a person is exempted from appearing in the court, an authorized agent may present
the application on his behalf. In certain circumstances where there are two or more plaintiffs,
the application can be presented by any of them. [Rule 3]. The suit begins as soon as the
application to sue as an indigent person is duly presented before the court. Subsequently, the
indigent person/applicant is examined by the court. However, if the applicant is being
represented by his agent, then in such a case, the court may examine the applicant by the
commission [Rule 4].

15. What is release of debtor कर्टदाराची सुर्का म्हणर्े काय

Release of debtor.-(1) At the time of making an order admitting the petition or at any
subsequent time before adjudication the court may, if the debtor is under arrest or imprisonment
in execution of the decree or order of any court for the payment of money, order his release on
such terms as to security as may be reasonable and necessary.

(2) The court may, at any time, order any person who has been released under this section to
be re-arrested and recommitted to the custody from which he was released.

(3) At the time of making an order under this section, the court shall record in writing its reasons
therefor.
16. What does the Insolvency Resolution Process Costs include? लदवाळखोरी ठराव
प्रलियेच्या खचाटमध्ये काय समालवष् आहे
Insolvency resolution process costs” means – (a) the amount of any interim finance and the
costs incurred in raising such finance (b) the fees payable to any person acting as a resolution
professional (c) any costs incurred by the resolution professional in running the business of the
corporate debtor as a going concern (d) any costs incurred at the expense of the Government
to facilitate the insolvency resolution process; and (e) any other costs as may be specified by
the Board (IBBI) – Section 5(13) of Insolvency Code, 2016.

17. What documents are required to be submitted by an Operational Creditor along

with the application for CIRP? सी आय आर पी साठी अर्ाटसोबत कायटचिन िनकोस कोणती
कार्गदपत्रे सादर करणे आवश्यक आहे

Section 9(3)
The operational creditor shall, along with the application furnish—

(a) a copy of the invoice demanding payment or demand notice delivered by the operational
creditor to the corporate debtor;

(b) an affidavit to the effect that there is no notice given by the corporate debtor relating to a
dispute of the unpaid operational debt;

(c) a copy of the certificate from the financial institutions maintaining accounts of the
operational creditor confirming that there is no payment of an unpaid operational debt by the
corporate debtor, if available; and

(d) a copy of any record with information utility confirming that there is no payment of an
unpaid operational debt by the corporate debtor, if available; and

(e) any other proof confirming that there is no payment of an unpaid operational debt by the
corporate debtor or such other information, as may be prescribed.
18. What is the concept inability to pay debt? कर्ट फेडण्यास असमर्टता लह सांकल्पना
स्पष् करा

Insolvency is a term for when an individual or company can no longer meet their
financial obligations to lenders as debts become due. Before an insolvent company or
person gets involved in insolvency proceedings, they will likely be involved in informal
arrangements with creditors, such as setting up alternative payment arrangements.
Insolvency can arise from poor cash management, a reduction in cash inflow, or an
increase in expenses.

Insolvency is a state of financial distress in which a person or business is unable to pay

their debts.

Insolvency in a company can arise from various situations that lead to poor cash flow.

When faced with insolvency, a business or individual can contact creditors directly and
restructure debts to pay them off.

19. Dismissal of petition filed by a creditor िनको ने दाखि केिेई यालचका फेर्ाळने

20. Explain absconding with intent to defeat the creditors. कर्टदाराांना प्रराभूत
करण्याच्या हे तूने फरार झाल्याचे स्पष् करा

Where a bankrupt has absconded or attempts to absconds or

leaves, or attempts to leave the country without delivering the

possession of any property which he is required to deliver to the

Bankruptcy Trustee under Section 156, after the bankruptcy

commencement date, he shall be punishable with imprisonment for a

term which may extend to one year, or with fine, which may extend

to five lakh rupees, or with both.

21 What is operational debt?

 "“debt” means a liability or obligation in respect of a claim which is due from any
person and includes a financial debt and operational debt;
“operational debt” means a claim in respect of the provision of goods or services including
employment or a debt in respect of the 2[payment] of dues arising under any law for the time
being in force and payable to the Central Government, any State Government or any local
authority;.. Section 5.21"

22 What are the functions of information utility?

"“information utility” means a person who is registered with the Board as an
information utility under section 210;.. Section 3.21
Functions of Information Utility (Sec. 214)
a) create and store financial information in a universally accessible format;
(b) accept electronic submissions of financial information from persons who are under
obligations to submit financial information under sub-section (1) of section 215, in such form
and manner as may be specified by regulations;
(c) accept, in specified form and manner, electronic submissions of financial information from
persons who intend to submit such information;
(d) meet such minimum service quality standards as may be specified by regulations;
(e)get the information received from various persons authenticated by all concerned parties
before storing such information;
(f) provide access to the financial information stored by it to any person who intends to access
such information in such manner as may be specified by regulations;
(g) publish such statistical information as may be specified by regulations.
(h) have inter-operatability with other information utilities."
23 What is the rule as to surplus in bankruptcy proceedings?

Section 176: Final Divident

If a surplus remains after payment in full with interest to all the creditors of the bankrupt and
the payment of the expenses of the bankruptcy, the bankrupt shall be entitled to the surplus.
Section 177:
Any surplus remaining after the payment of the debts under sub-section (1) shall be applied in
paying interest on those debts in respect of the periods during which they have been outstanding
since the bankruptcy commencement date.
Where there is a surplus of the separate property of the partners, it shall be dealt with as part
of the partnership property; and where there is a surplus of the partnership property, it shall be
dealt with as part of the respective separate property in proportion to the rights and interests of
each partner in the partnership property.
24 What changes were brought in IBC to deal with pandemic?
During such testing times, with a view to prevent triggering of the provisions of Insolvency
and Bankruptcy Code, 2016 (Code) mainly against the Micro, Small and Medium Scale
Enterprises (MSMEs), the Central Government, vide Notification dated March 24, 2020,
increased the threshold for invoking the provisions of the Code from Rs. 1 lakh to Rs. 1 crore.

10A – Suspension of initiation of Corporate Insolvency Resolution Process:

Notwithstanding anything contained in Section 7, 9 and 10, no application for initiation of
corporate insolvency resolution process of a corporate debtor shall be filed for any default
rising on or after 25th March 2020 for a period of six months or such further period, not
exceeding one year from such date, as may be notified in this behalf:
Provided that no application shall ever be filed for initiation of corporate insolvency resolution
process of a corporate debtor for the said default occurring during the said period.
Explanation.- For the removal of doubts, it is hereby clarified that the provisions of this section
shall not apply to any default committed under the said sections before 25th March, 2020.”
25 "Raghav Patel is undergoing insolvency resolution. There are 7 creditors
including his brother. Who will make the repayment plan?
“repayment plan” means a plan prepared by the debtor in consultation with the resolution
professional under section 105 containing a proposal to the committee of creditors for
restructuring of his debts or affairs;
(1) The debtor shall prepare, in consultation with the resolution professional, a repayment plan
containing a proposal to the creditors for restructuring of his debts or affairs.
( 2) The repayment plan may authorise or require the resolution professional to -
(a) carry on the debtor's business or trade on his behalf or in his name; or
(b) realise the assets of the debtor; or
(c) administer or dispose of any funds of the debtor.
( 3)The repayment plan shall include the following, namely: -
(a) justification for preparation of such repayment plan and reasons on the basis of which the
creditors may agree upon the plan;
(b) provision for payment of fee to the resolution professional;
(c) such other matters as may be specified."
26 "Bring out the distinction between liquidation process and voluntary liquidation
process.
liquidation of corporate debtors where the minimum amount of the default is one lakh rupees.
It can be done from Section 7,8,9,10 by Financial Creditor, Operational Creditor, or by
Corporate Applicant
Provided that the Central Government may, by notification, specify the minimum amount of
default of higher value which shall not be more than one crore rupees.

Voluntary liquidation process is done through section 59 of IBC..

(1) A corporate person who intends to liquidate itself voluntarily and has not committed any
default may initiate voluntary liquidation proceedings under the provisions of this Chapter.
(2) The voluntary liquidation of a corporate person under sub-section (1) shall meet such
conditions and procedural requirements as may be specified by the Board."

27 X wants to sue as an indigent person. When will she be eligible?

Provincial Bankrupty Code

28 A corporate debtor is undergoing a resolution process. What are the past

transactions of the corporate debtor that can be avoided by the insolvency resolution
professional? State the procedure for avoiding them.

Section 43 to 51 are onerable transaction are avoidable transactions.

Undervalued Transaction
Section 50: Extortionate Transaction
Preferential Transaction

29 To whom shall the provisions of the Code apply?

The provisions of this Code shall apply to—

(a) any company incorporated under the Companies Act, 2013 or under
any previous company law;
(b) any other company governed by any special Act for the time being in force, except
in so far as the said provisions are inconsistent with the provisions of such special Act;
(c) any Limited Liability Partnership incorporated under the Limited Liability Partnership Act,
2008 ;
(d) such other body incorporated under any law for the time being in force, as the Central
Government may, by notification specify
(e) personal guarantors to corporate debtors;
(f) partnership firms and proprietorship firms; and
(g) individuals,
in relation to their insolvency, liquidation, voluntary liquidation or bankruptcy, as the case may
be. It applies to corporates but not those in financial sector.

30 "Define the terms ‘Debt’ and ‘Claim’ under the Code.

“debt” means a liability or obligation in respect of a claim which is due from any person and
includes a financial debt and operational debt;
“claim” means –
(a) a right to payment, whether or not such right is reduced to judgment, fixed,
disputed, undisputed, legal, equitable, secured, or unsecured;
(b) right to remedy for breach of contract under any law for the time being in force,
if such breach gives rise to a right to payment, whether or not such right is reduced to
judgment, fixed, matured, unmatured, disputed, undisputed, secured or unsecured; .. Section
3.6"
31 "What is the significance of the Corporate Insolvency Resolution Commencement
Date? And what is the effect of order on moratorium?
“insolvency commencement date” means the date of admission of an application for initiating
corporate insolvency resolution process by the Adjudicating Authority under sections 7, 9 or
section 10

Effect of insolvency Professional on Moratorium (Section 14)

on the insolvency commencement date, the Adjudicating Authority shall by order declare
moratorium for prohibiting all of the following, namely: -
(a) the institution of suits or continuation of pending suits or proceedings against the corporate
debtor including execution of any judgement, decree or order in any court of law, tribunal,
arbitration panel or other authority;
(b) transferring, encumbering, alienating or disposing off by the corporate debtor any of its
assets or any legal right or beneficial interest therein;
(c) any action to foreclose, recover or enforce any security interest created by the corporate
debtor in respect of its property"
32 Does resolution professional require approval of Committee of Creditors for
performance of his duties?
Section 28: The resolution professional shall convene a meeting of the committee of creditors
and seek the vote of the creditors prior to taking any of the actions under sub-section (1).
(3) No action under sub-section (1) shall be approved by the committee of creditors
unless approved by a vote of 1[sixty-six] per cent. of the voting shares.
(4) Where any action under sub-section (1) is taken by the resolution professional
without seeking the approval of the committee of creditors in the manner as required in
this section, such action shall be void.
(5) The committee of creditors may report the actions of the resolution professional
under sub-section (4) to the Board for taking necessary actions against him under this code.
33 Under what circumstances transactions will not be referred to as preferential
transactions?

Section 43 Preferential transactions and relevant time

Where the liquidator or the resolution professional, as the case may be, is of the opinion that
the corporate debtor has at a relevant time given a preference in such transactions and in such
manner as laid down in sub-section (2) to any persons as referred to in sub-section (4), he shall
apply to the Adjudicating Authority for avoidance of preferential transactions

A corporate debtor shall be deemed to have given a preference, if–

a) there is 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
operational debt or other liabilities owed by the corporate debtor

b) the transfer under clause (a) has 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.
preference shall not include the following transfers–

(a) transfer made in the ordinary course of the business or financial affairs of the corporate
debtor or the transferee;
(b) any transfer creating a security interest in property acquired by the corporate debtor to the
extent that –
(i) such security interest secures new value and was given at the time of or after the signing of
a security agreement that contains a description of such property as security interest, and was
used by corporate debtor to acquire such property; and
(ii) such transfer was regist ered with an information utility on or before thirty days after the
corporate debtor receives possession of such property: Provided that any transfer made in
pursuance of the order of a court shall not, preclude such transfer to be deemed as giving of
preference by the corporate debtor.

34 "What is fast track insolvency resolution process? And can the time period for
fast-track corporate insolvency resolution process be extended?
Section 55: An application for fast track corporate insolvency resolution process may be made
in respect of the following corporate debtors, namely: -
(a) a corporate debtor with assets and income below a level as may be notified by the Central
Government; or
(b) a corporate debtor with such class of creditors or such amount of debt as may be notified
by the Central Government; or
(c) such other category of corporate persons as may be notified by the Central Government.
Section 56:
Subject to the provisions of sub-section (3), the fast track corporate insolvency resolution
process shall be completed within a period of ninety days from the insolvency commencement
date."
35 "When can a corporate person initiate voluntary liquidation process and explain the
process?
Section 10: Where a corporate debtor has committed a default, a corporate applicant thereof
may file an application for initiating corporate insolvency resolution process with the
Adjudicating Authority.
The corporate applicant shall, along with the application, furnish-
(a) the information relating to its books of account and such other documents for such period
as may be specified;
(b) the information relating to the resolution proposed to be appointed as an interim resolution
professional; and
(c) the special resolution passed by shareholders of the corporate debtor or the resolution passed
by at least three-fourth of the total number of partners of the corporate debtor, as the case may
be, approving filing of the application.]

Process:
The Adjudicating Authority shall, within a period of fourteen days of the receipt of the
application, by an order-
(a) admit the application, if it is complete 1[and no disciplinary proceeding is pending against
the proposed resolution professional]; or
(b) reject the application, if it is incomplete 2[or any disciplinary proceeding is pending against
the proposed resolution professional]:
Provided that Adjudicating Authority shall, before rejecting an application, give a notice to the
applicant to rectify the defects in his application within seven days from the date of receipt of
such notice from the Adjudicating Authority."
36 What are the restrictions imposed on a Bankrupt?

Section 140: Disqualification of Bankrupt

Section 141: Restriction on Bankrupt
Section 83: Examination of application by RP

37 Which are the acts that require approval from creditors prior to being conducted
by the Bankruptcy Trustee?

Section 28: Approval of committee of creditors for certain actions

(a) raise any interim finance in excess of the amount as may be decided by the committee of
creditors in their meeting;
(b) create any security interest over the assets of the corporate debtor; issuance of additional
securities, creating a new class of securities or buying back or redemption of issued securities
in case the corporate debtor is a company;
(d) record any change in the ownership interest of the corporate debtor;
(e) give instructions to financial institutions maintaining accounts of the corporate debtor for a
debit transaction from any such accounts in excess of the amount as may be decided by the
committee of creditors in their meeting;
(f) undertake any related party transaction;
(g) amend any constitutional documents of the corporate debtor;
(h) delegate its authority to any other person;
(i) dispose of or permit the disposal of shares of any shareholder of the corporate debtor or their
nominees to third parties;
(j) make any change in the management of the corporate debtor or its subsidiary;
(k) transfer rights or financial debts or operational debts under material contracts
otherwise than in the ordinary course of business;
(l) make changes in the appointment or terms of contract of such personnel as
specified by the committee of creditors; or
(m) make changes in the appointment or terms of contract of statutory auditors or
internal auditors of the corporate debtor.

38 "What is onerous property? Who can make an application to challenge against

disclaimed property?
As per section 160, the term “onerous property” means -
(i) any unprofitable contract; and
(ii) any other property comprised in the estate of the bankrupt which is unsaleable or not readily
saleable, or is such that it may give rise to a claim."
39 "When are the provisions of Insolvency and Liquidation applicable to a corporate
person?
As per Section 3, “corporate person” means a company as defined in clause (20) of section 2
of the Companies Act, 2013 (18 of 2013), a limited liability partnership, as defined in clause
(n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009),
or any other person incorporated with limited liability under any law for the time being in force
but shall not include any financial service provider;"
40 "What is the Insolvency Resolution Process for financial creditors?
Section 7: Initiation of corporate insolvency resolution process by financial creditor - A
financial creditor either by itself or jointly with 2[other financial creditors, or any other person
on behalf of the financial creditor, as may be notified by the Central Government] may file an
application for initiating corporate insolvency resolution process against a corporate debtor
before the Adjudicating Authority when a default has occurred.

an application for initiation corporate insolvency resolution process against the corporate
debtor shall be filed jointly by not less than one hundred of such creditors in the same class or
not less than ten per cent. of the total number of such creditors in the same class, whichever is
less: Provided further that for financial creditors who are allottees under a real estate project,
an application for initiating corporate insolvency resolution process against the corporate
debtor shall be filed jointly by not less than one hundred of such allottees under the same real
estate project or not less than ten per cent. of the total number of such allottees under the same
real estate project, whichever is less:"

41. What is the procedure of Insolvency Resolution Process for a Corporate

Applicant?
42. Write facts and the principles laid down in this case Firm Mukundlal Veerkumar
v. Purushottam Singh matter.
43. Write a fact and the principle laid down in this M.R. Arunmgham v. Velammal
matter.
44. Write a short on Arrest of Debtor?

Answer 44: Arrest of Debtor:-

(1) The Court may, either of its own motion or at the instance of the official assignee or of any
creditor, by warrant addressed to any police- officer or prescribed officer of the Court, cause
an insolvent(debtor) to be arrested, and committed to the civil prison or if in prison to be
detained until such time as the Court may order, under the following circumstances, namely:--
(a) if it appears to the Court that there is probable reason for believing that he has absconded
or is about to abscond with a view of avoiding examination in respect of his affairs, or of
otherwise avoiding, delaying or embarrassing proceedings in insolvency against him; or
(b) if it appears to the Court that there is probable reason for believing that he is about to remove
his property with a view of preventing or delaying possession being taken of it by the official
assignee, or that there is probable reason for believing that he has concealed or is about to
conceal or destroy any of his property or any books, documents or writings which might be of
use to his creditors in the course of his insolvency; or
(c) if he removes any property in his possession above the value of fifty rupees without the
leave of the official assignee.
(2) No payment or composition made or security given after arrest made under this section
shall be exempt from the provisions of this Act relating to fraudulent preferences.

45. A debtor ‘X’ makes a transfer of all substantially all his property to third person
for the benefit of his creditors generally.
a)State and explain the consequences of ‘X’s transfer
A debtor commits an act of insolvency : if, in the States or elsewhere, he makes a transfer of
all or substantially all his property to a third person for the benefit of his creditors generally.
The transfer will be void as a fraudulent preference if he were adjudged an insolvent.

46. Mr. K is insolvent and is required to apply for discharge within a stipulated time
Mr.‘A’ applies for discharge accordingly.
a) What are the consequences of a discharge if the insolvent is discharged by the
court? / लदवाळखोर र्र न्यायाियाने लडस्चार्ट केिा तर लडस्चार्टचे काय पररणाम होतीि?

:If an insolvent does not appear on the day so appointed for hearing his application for discharge
or if an insolvent shall not apply to the Court for an order of discharge within such time as may
be prescribed, the Court, on the application of the official assignee or of a creditor or of its own
motion, may annul the adjudication or make such other order as it may think fit.

47. Describe in brief the activities prohibited during the moratorium period under
Part II of the Insolvency and Bankruptcy Code, 2016.

The following activities are prohibited: -

(a) the institution of suits or continuation of pending suits or proceedings against
the corporate debtor including execution of any judgement, decree or order in any court
of law, tribunal, arbitration panel or other authority;
(b)transferring, encumbering, alienating or disposing off by the corporate debtor
any of its assets or any legal right or beneficial interest therein;
(c) any action to foreclose, recover or enforce any security interest created by the
corporate debtor in respect of its property
(d)the recovery of any property by an owner or lessor where such property is
occupied by or in the possession of the corporate debtor. The supply of essential goods or
services to the corporate debtor as may be specified shall not be terminated or suspended or
interrupted during moratorium period.

48. Write a short note on “authorised representative” for class of financial creditors.

Where a financial debt is in the form of securities or deposits and the terms of the financial
debt
provide for appointment of a trustee or agent to act as authorised representative for
all the financial creditors, such trustee or agent shall act on behalf of such financial creditors.
Such authorised representative shall attend the meetings of the committee of creditors, and vote
on behalf of each
financial creditor to the extent of his voting share.) It shall be the duty of the authorised
representative to circulate the agenda and minutes of the meeting of the committee of creditors
to the financial creditor he represents.The authorised representative shall not act against the
interest of the financial creditor he represents and shall always act in accordance with their
prior instructions.

49. Write a brief note on the functions of the Insolvency and Bankruptcy Board of
India.
The powers and functions of the
I&B Board can be summarized as: 1. Register insolvency professional agencies, insolvency
professionals and information utilities and renew, withdraw, suspend or cancel such
registrations.

2. promote the development of, and regulate, the working and practices of, insolvency
professionals, insolvency professional agencies and information utilities and other institutions,
in furtherance of the purposes of this Code.

3.Specify the minimum eligibility requirements for registration of insolvency professional

agencies, insolvency professionals and information utilities.
4. Levy fee or other charges for carrying out the purposes of this Code, including fee for
registration and renewal of insolvency professional agencies, insolvency professionals and
information utilities.

5. Specify by regulations standards for the functioning of insolvency professional agencies,

insolvency professionals and information utilities.

6. Lay down by regulations the minimum curriculum for the examination of the insolvency
professionals for their enrolment as members of the insolvency professional agencies.

7. Carry out inspections and investigations on insolvency professional agencies, insolvency

professionals and information utilities and pass such orders as may be required for compliance
of the provisions of this Code and the regulations issued hereunder.

8. Monitor the performance of insolvency professional agencies, insolvency professionals and

information utilities and pass any directions as may be required for compliance of the
provisions of this Code and the regulations issued hereunder.

9. Call for any information and records from the insolvency professional agencies, insolvency
professionals and information utilities.

10. Publish such information, data, research studies and other information as may be specified
by regulations.

11. Specify by regulations the manner of collecting and storing data by the information utilities
and for providing access to such data.

12. Collect and maintain records relating to insolvency and bankruptcy cases and disseminate
information relating to such cases. and many more

50. Write a short on the order of priority in which the proceeds from the sale of the
liquidation assets shall be distributed under the Insolvency and Bankruptcy Code, 2016.

The order of priority in which the proceeds from the sale of liquidation assets shall be
distributed as per the priority given : 1.Insolvency Resolution Process Cost (if any) &
liquidation costs- in full . 2.workmen’s dues for 24 months prior to LCD; & Secured creditors
3.Employee dues (other than workmen) for 12 months prior to LCD 4.Financial debts owed to
unsecured creditors 5.Statutory dues for 24 months prior to LCD & Remaining amount towards
secured creditors 6.Remaining debts and dues 7.Preference shares and lastly Equity
shareholders.

51. Write a short note on the “Committee of Creditors”.

The interim resolution professional shall after collation of all claims received
against the corporate debtor and determination of the financial position of the corporate
debtor, constitute a committee of creditors. The committee of creditors shall comprise all
financial creditors of the corporate debtor. Under the Code, the CoC is authorized to decide
upon the regular functioning of the corporate debtor during the insolvency resolution process.
The CoC conducts regular meetings, wherein it discusses the fate of the corporate debtor. It
rules over the working of the Resolution Professional (RP) and possesses the power to approach
the Adjudicatory Authority in the event of foul play. Further, it ratifies any administrative
decisions taken by the RP. It determines the viability of the corporate debtor’s business,
examines the feasibility of future operations, payments towards CIRP costs and may also
resolve to immediately liquidate the corporate debtor, where it finds that the resolution of
insolvency is bound to fail.

52. Write a brief note on persons ineligible to be resolution applicants.

The following are the persons ineligible to be resolution applicants are:1. a corporate debtor
undergoing a corporate insolvency resolution process 2. a financial creditor or an operational
creditor of a corporate debtor
undergoing a pre-packaged insolvency resolution process 3. a corporate debtor having
completed corporate insolvency resolution process twelve months preceding the date of making
of the application 4. a corporate debtor in respect of whom a resolution plan has been approved
twelve months preceding the date of making of the application 5. a corporate debtor or a
financial creditor who has violated any of the terms of
resolution plan which was approved twelve months before the date of making of an
application 6. a corporate debtor in respect of whom a liquidation order has been made.

53. Write a short note on voluntary liquidation of corporate persons under the
Insolvency and Bankruptcy Code, 2016.

A corporate person who intends to liquidate itself voluntarily and has not committed any
default may initiate voluntary liquidation proceedings. Voluntary liquidation refers to
dissolution of a solvent corporate debtor with the approval of shareholders of the Company. It
is a liquidation process with minimum intervention of court. The directors of the company shall
make a declaration in the form of affidavit confirming: They have made full inquiry into the
affairs of the Company and is of opinion that company has no debt, That company is solvent
and able to pay its debt in full, The company is not being liquidated to defraud any person. The
declaration shall provide the company’s debt status as on the date accompanied with audited
financial statement and record of business operation of the company for the previous two years
or for the period since its incorporation and valuation report on the assets of the company
prepared by registered valuer. Convene general meeting of members of the company within 4
weeks from declaration for approval of the following; Voluntary liquidation shall be approved
by the shareholders of the company by passing special resolution, Appoint insolvency
professional to act as a liquidator. In case company owes any debt from any person, it shall be
approved by creditors representing 2/3rd in value of the debt of the company within 7 days
from the date of shareholder’s approval. The Company through its liquidator shall file the
resolution passed for voluntary liquidation to the ROC and IBBI within 7 days from resolution
passed by shareholder or the subsequent approval by creditor. Liquidation proceeding shall be
deemed to have commenced from obtaining the approval form shareholders and creditor.

54. Write a brief note on excluded asset. / वर्गळिेल्या मािमत्तेवर एक सांलिप्त र्ीप लिहा.
“Excluded assets” includes:
(a) unencumbered tools, books, vehicles and other equipment as are necessary to
the debtor or bankrupt for his personal use or for the purpose of his employment,
business or vocation,
(b) unencumbered furniture, household equipment and provisions as are necessary
for satisfying the basic domestic needs of the bankrupt and his immediate family;
(c) any unencumbered personal ornaments of such value, as may be prescribed, of
the debtor or his immediate family which cannot be parted with, in accordance with
religious usage;
(d) any unencumbered life insurance policy or pension plan taken in the name of
debtor or his immediate family; and
(e) an unencumbered single dwelling unit owned by the debtor of such value as
may be prescribed.

55. What is financial information? आलर्ट क मार् ल ती काय लआ े ?

“Financial information”, in relation to a person, means one or more of the following

categories of information, namely: -
(a) records of the debt of the person;
(b) records of liabilities when the person is solvent;
(c)records of assets of person over which security interest has been created;
(d) records, if any, of instances of default by the person against any debt;
(e) records of the balance sheet and cash-flow statements of the person; and
(f) such other information as may be specified.

56. State is the applicability of IBC नादारी आर् ल दट वाळखोरी सांर्ल ता ची िार्गूता साांर्गा.

The provisions of this Code shall apply to—

(a) any company incorporated under the Companies Act, 2013 or under
any previous company law;
(b) any other company governed by any special Act for the time being in force, except
in so far as the said provisions are inconsistent with the provisions of such special Act;
(c) any Limited Liability Partnership incorporated under the Limited Liability Partnership Act,
2008 ;
(d) such other body incorporated under any law for the time being in force, as the Central
Government may, by notification specify
(e) personal guarantors to corporate debtors;
(f) partnership firms and proprietorship firms; and
(g) individuals,
in relation to their insolvency, liquidation, voluntary liquidation or bankruptcy, as the case may
be. It applies to corporates but not those in financial sector.

57. List the powers of the IP in CIRP? कॉपोरे र् दट वाळखोरी ठराव प्रर् ल या मध्येदटवाळखोर
व्यावसायटकाां च्या अर् ल काराांची यादी करा

Where any insolvency resolution, fresh start, liquidation or bankruptcy process has

been initiated, it shall be the function of an insolvency professional to take such actions
as may

be necessary, in the following matters, namely: –

(a) a fresh start order process

(b) individual insolvency resolution process

(c) corporate insolvency resolution process

(d) individual bankruptcy process

(e) liquidation of a corporate debtor firm. Moreover, Every insolvency professional shall
abide by the following code of conduct:

(a) to take reasonable care and diligence while performing his duties;

(b) to comply with all requirements and terms and conditions specified in the byelaws
of the insolvency professional agency of which he is a member;

(c) to allow the insolvency professional agency to inspect his records;

(d) to submit a copy of the records of every proceeding before the Adjudicating

Authority to the Board as well as to the insolvency professional agency of which he is

a member; and

(e) to perform his functions in such manner and subject to such conditions as may

be specified.

58. What is liquidation estate?नट रवानटरव इस्टे र् म्हम्हर्ेकाय?

For the purposes of liquidation, the liquidator shall form an estate of the assets which will be
called the liquidation estate in relation to the corporate debtor. It includes:
(a) any assets over which the corporate debtor has ownership rights, including all rights and
interests therein as evidenced in the balance sheet of the corporate debtor or an information
utility or records in the registry or any depository recording securities of the corporate debtor
or by any other means as may be specified by the Board, including shares held in any subsidiary
of the corporate debtor;
(b) assets that may or may not be in possession of the corporate debtor including but not limited
to encumbered assets;
(c) tangible assets, whether movable or immovable;
(d) intangible assets including but not limited to intellectual property, securities (including
shares held in a subsidiary of the corporate debtor) and financial instruments, insurance
policies, contractual rights;
(e) assets subject to the determination of ownership by the court or authority;
(f) any assets or their value recovered through proceedings
(g) any asset of the corporate debtor in respect of which a secured creditor has relinquished
security interest;
(h) any other property belonging to or vested in the corporate debtor at the insolvency
commencement date; and
(i) all proceeds of liquidation as and when they are realised.
The liquidator shall hold the liquidation estate as a fiduciary for the benefit of all the creditors.
(4) The following shall not be included in the liquidation estate assets and shall not be used for
recovery in the liquidation:—

(a) assets owned by a third party which are in possession of the corporate debtor, including—

(i) assets held in trust for any third party;

(ii) bailment contracts;

(iii) all sums due to any workman or employee from the provident fund, the pension fund and
the gratuity fund;

(iv) other contractual arrangements which do not stipulate transfer of title but only use of the
assets; and

(v) such other assets as may be notified by the Central Government in consultation with any
financial sector regulator;

(b) assets in security collateral held by financial services providers and are subject to netting
and set-off in multi-lateral trading or clearing transactions;

(c) personal assets of any shareholder or partner of a corporate debtor as the case may be
provided such assets are not held on account of avoidance transactions that may be avoided
under this Chapter;

(d) assets of any Indian or foreign subsidiary of the corporate debtor; or

(e) any other assets as may be specified by the Board, including assets which could be subject
to set-off on account of mutual dealings between the corporate debtor and any creditor.

59. What is a Resolution plan? ठराव योर्ना काय लआ े ?

A resolution plan is a proposal that aims to provide a resolution to the problem of the corporate
debtor’s insolvency and its consequent inability to pay off debts. It needs to be approved by
the committee of creditors (“COC”), and comply with mandatory requirements prescribed in
IBC. “Resolution plan” means a plan proposed by resolution applicant for insolvency
resolution of the corporate debtor as a going concern . A resolution plan may
include provisions for the restructuring of the corporate debtor, including by way of merger,
amalgamation and demerger.

60. What do you understand by Fast track CIRP? फास्ट र्रक कॉपोरे र् दट वाळखोरी
ठराव प्रर् ल या द्वारे तु म्हािा काय समर्ते ?

The main purpose behind the inclusion of the concept of fast track CIRP under the insolvency
law was to improve the ease of business ranking of our country. Fast track CIRP proceedings
aim to eliminate the excess delay which is caused due to the insolvency process of a small-
scale company. The procedure pertaining to the fast track insolvency of small-scale enterprises
is enshrined under Ss. 55 to 58 of the Insolvency and Bankruptcy Code. Small-sized
Companies, Start-up Company other than a Partnership Firm and an Unlisted Company with
total assets less than one crore rupees can make an application for Fast track CIRP. The process
is completed in 90 days . Extention can be sought only time with 75% of voting share for 45
days.