INSOLVENCY AND BANKRUPTCY LAW PRACTICE PAPER

1. “Business or debtor who has defaulted and creditors can initiate insolvency resolution
process (IRP).”
Is the above statement correct according to the insolvency and bankruptcy code 2016?
A. YES
B. NO
2. Bhushan Steel Ltd is the first bankruptcy case in the country resolved under the
Insolvency and Bankruptcy Code 2016. Is it true?
A. YES
B. NO
3. In case the company goes for liquidation, the following is the order of priority for
settlement of claims:
insolvency resolution process costs and the liquidation cost >debts owed to a secured
creditor > workmen’s dues for twenty-four months >wages and any unpaid dues owed to
employees other than workmen > government dues > debts owed to unsecured creditors >
any remaining debts and dues > preference shareholders > equity shareholders or
partners.
Is the above-given sequence true or not?
A. YES
B. NO
4. National Law Liquidation tribunal is the adjudicating authority in case of insolvency
resolution for individual or proprietor firms. Do you agree with this statement?
A. YES
B. NO
5. the Insolvency and Bankruptcy Code aims to overhaul the existing framework for
dealing with the insolvency of corporations, individuals, partnerships, and other entities.
Is this statement factually correct?
A. YES
B. NO
6. the minimum default required to initiate an insolvency procedure for corporate debtors
under the Insolvency and Bankruptcy Code is 5,00,000. Is it by the Insolvency and
Bankruptcy code?
A. YES
B. NO
7. PNB initiated Corporate Insolvency Resolution Process against Nirav Modi Pvt Ltd for
the default in the capacity of corporational Debtor. Is it correct as per the Insolvency and
Bankruptcy code?
A. YES
B. NO

8. PNB through an agreement, assigned here the debt to the X trust. X trust filed the petition
for initiation of the corporate insolvency resolution process (CIRP) against Nirav Modi
Pvt Ltd. Here X Trust in the capacity of a financial creditor can file a valid petition. Is
this situation legally, correct? Answer in the enlightenment of Insolvency and Bankruptcy
Code.
A. YES
B. NO

9. A and B who are classmates are having an argument over the number of days a C reditor
has to proceed with a revival plan failing with the company forced to go for liquidation.
A is arguing that the correct number of days is 90 while B is arguing that the number of
days herein this process is 180. One of them is correct? So do you think A is correct in
this argument?
A. YES
B. NO
10. At least 75% of creditors must agree to a revival plan. Is the above statement correct as
per the provisions of the Insolvency and Bankruptcy code?
A. YES
B. NO
11. A person X, being an Insolvency Professional can be appointed as Resolution
Professional, if: He is eligible to be appointed as an independent director under section
 149 of the Companies Act, 2013 or he is not a related party of the corporate debtor. Is it
true?
A. YES
B. NO

12. The word “audit or” has been defined under the Code, which means A Chartered
Accountant who is a member of the Institute of Chartered Accountants of India. Is it
accurate?
a. Yes
b. No

13. Secured debts are paid off in Chapter 13.

a. Yes
b. No

14. Liquidation of assets is a part of the Insolvency Resolution Process under the Insolvency
and Bankruptcy Code (IBC). Do you agree with this statement?
A. YES
B. NO
15. Rs 1,000 is the minimum amount required for attracting the insolvency code in case of
individual defaulters and unlimited partnerships. Is this a false statement or not?
A. YES
B. NO

ANSWERS

1. A
2. A
3. B
In case the company goes for liquidation, the following is the order of priority for
settlement of claims: insolvency resolution process costs and the liquidation cost,
workmen’s dues for the period of twenty-four months, debts owed to a secured
creditor, wages, and any unpaid dues owed to employees other than workmen,
 debts owed to unsecured creditors, government dues, any remaining debts and
dues, preference shareholders, equity shareholders or partners.
4. B
DRT acts as adjudicating authority for individual cases.
5. A
6. B
1,00,000 is the minimum required amount.
7. B
As per the Insolvency and bankruptcy code, it should be against the financial
creditor.
8. A
9. B
180 days is the correct answer. 90 days maximum extension can be provided after
the completion of 180 days.
10. A
11. B
Both the conditions must be fulfilled. If one of them is fulfilled and other is not
then the person is not eligible.
12. B
A Chartered Accountant certified to practice as such by the Institute of Chartered
Accountants of India
13. A
14. A
15. A