April 27, 2008 Foreign Exchange Management Act, 1999 - Harshal Kamdar.
Chapter 1 : FOREIGN EXCHANGE MANAGEMENT ACT, 1999 · 31 Examine with reference to the provisions of...
Transcript of Chapter 1 : FOREIGN EXCHANGE MANAGEMENT ACT, 1999 · 31 Examine with reference to the provisions of...
Chapter 1 FOREIGN EXCHANGE MANAGEMENT ACT, 1999
© CA Darshan D. Khare
1.1
Chapter 1 : FOREIGN EXCHANGE MANAGEMENT ACT, 1999
1. Who is an Authorized Dealer?
a. any person specifically authorized by
the RBI u/s 10(1) of FERA, 1973, to deal
in foreign exchange or foreign securities
b. any person specifically authorized by the RBI u/s
10(1) of FEMA, 1999, to deal in foreign products or
foreign items
c. any person specifically authorized by
the RBI u/s 10(1) of FEMA, 1999, to deal
in foreign exchange or foreign securities
d. any person specifically authorized by the RBI u/s
10(1) of RBI Act, 1999, to deal in foreign exchange or
foreign securities
2. Any PROI, not being a citizen of Pakistan or Bangladesh, and visiting India: may take outside India
(including to Nepal & Bhutan) max Rs.
a. 25000 b. 50000
c. 100000 d. 500000
3 “Current account transaction” means a transaction other than a capital account transaction and
without prejudice to the generality of the foregoing such transaction includes
a. payments due in connection with foreign trade, other
current business, services and short term banking and
credit facilities in the ordinary course of business,
b. payments due as interest on loans
and as net income from
investments
c. remittances for living expenses of
parents ,spouse and children residing
abroad
d. expenses in relation to foreign travel, education
and medical care of parents, spouse and
children
e. All of the above
4. “Export” with its grammatical variations and cognate expressions means; or a. the taking out of India to a place
outside India any goods
b. provision of services from India to any person
outside India
c. Both d. None
5. Who is a “Person Resident outside India” as per the FEMA Act, 1999?
a. Who has taken birth out of India c. Who is gone out of India for 181 days
b. Who is not resident of India d. None of the above
6. Mr. Tom, an Indian national desires to obtain Foreign Exchange for payment of commission on
exports made towards equity investment in wholly owned subsidiary abroad of an Indian
Company. Advice whether Mr. Tom can obtain foreign exchange.
a. Prohibited b. Allowed
7. Mr. Alex had resided in India during the financial year 2016-17 for 183 days. He had come to
India again on April 1, 2017 for employment. What would be his residential status during the
financial year 2017-18?
a. Person resident in India b. Person resident outside India
8. Mr. John had resided in India during the financial year 2015-16 for more than 182 days. What is
his residential status under FEMA,1999 for 2016-17:
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a. Person resident in India b. Person resident outside India
9. A person left India on 1 August, 2016 for education for 3 years. What would be his residential
status for 2016-17 if he was residing in India for 200 days in FY 2015-16?
a. Person resident in India b. Person resident outside India
10 The following transactions are regarded as Capital Account Transaction
a. Any borrowing or lending in rupees in whatever form or by whatever name called between a
person resident in India and a person resident outside India
b. Export, import or holding of currency or currency notes
c. Deposits between persons resident in India and persons resident outside India
d. All of the above
11 Following transactions are prohibited under FEMA, 1999 unless permission of RBI is obtained:
a. to deal in or transfer of foreign exchange
or foreign security to any person other
than authorised person
b. make any payment to any person resident
outside India otherwise than authorised
person
c. receive any payment from any person resident outside India
otherwise than authorised person
d. All of the above
12 Shine Ltd. is a Korean company having manufacturing units in 4 countries. It is having it’s headquarter in Mumbai and Branch in Thailand. Headquarter at Mumbai controls branch of
manufacturing unit. What would be the residential status of manufacturing unit of Thailand?
a. Thailand Branch is ‘Person resident in India’ b. Thailand Branch is ‘Person resident outside India’ c. Thailand Branch is Foreign unit
d. Thailand branch is ordinarily resident
13 FEMA 1999 applies to all branches, offices and agencies outside India owned or controlled by a
person resident in India
a. True b. False
14 Authorised person contravenes any direction of RBI: penalty shall be
a. Upto 10000 b. Upto 10000 and 2000 per day if continuing
c. Upto 50000 and 5000 per day if continuing d. Upto 1 lakh
15 As per FEMA, a person residing for ------------------- in India is a person resident in India (subject to
exceptions)
a. for not less than 183 days b. for more than 182 days
c. for not less than 184 days d. for more than 181 days
16 For failure to pay penalty u/s 13 where such penalty < 1 crore: Civil Imprisonment shall be:
a. upto 6 months b. upto 1 year
c. upto 2 years d. upto 3 years
17 Under FEMA a person can undergo civil imprisonment u/s 14 if he fails to pay the full amount of
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penalty u/s 13:
a. within 60 days from service of notice to him b. within 90 days from order made to him
c. within 60 days from service of notice to him d. within 90 days from service of notice to him
18 For failure to pay penalty u/s 13 where such penalty > 1 crore: Civil Imprisonment shall be
a. upto 6 months b. upto 1 year
c. upto 2 years d. upto 3 years
19 ------ is not relevant for determining the residential status of a person in FEMA
a. Residence b. Place of Employment
c. Period of stay d. Citizenship
20 Champions Ltd. is Vietnam based company having several business units all over the world. It has
a unit for manufacturing toys with its headquarters in Pune. It has a branch in Singapore which is
controlled by the headquarters in Pune. What would be the Residential Status under FEMA, 1999
of unit in Pune?
a. Person resident outside India b. Person resident in India
c. Foreign Citizen d. None of the above
21 In continuation of the above question what would be the Residential Status under FEMA, 1999 of
unit in Singapore?
a. Person resident outside India b. Person resident in India
c. Foreign Citizen d. None of the above
22 Friends are a Philippine company having several business units all over the world. It has a
manufacturing unit called Enemies with headquarters in Kolkata. It has a branch in Germany
which is controlled by the headquarters in Kolkata. What would be the residential status under
FEMA 1999 of Kolkata headquarter?
a. Person resident outside India b. Person resident in India
c. Foreign Citizen d. None of the above
23 In continuation of the above question what would be the Residential Status under FEMA, 1999 of
Germany branch?
a. Person resident outside India b. Person resident in India
c. Foreign Citizen d. None of the above
24 In continuation of the question number 22 what would be the Residential Status under FEMA,
1999 of Friends?
a. Person resident outside India b. Person resident in India
c. Foreign Citizen d. None of the above
25 Examine whether the following branch can be considered as a “person resident in India” under the Foreign Exchange Management Act,1999
EFG Ltd, a company incorporated in India established a branch at Paris on 1 January 2017.
a. Person resident outside India b. Person resident in India
c. Foreign Citizen d. None of the above
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26 Examine whether the following branch can be considered as a “person resident in India” under the Foreign Exchange Management Act, 1999
STU, a foreign company, established a branch at Chennai on 1 January 2017. The Chennai branch
controls a branch at Greece. What is the status of Chennai Branch
a. Person resident in India b. Person resident outside India
c. Foreign Citizen d. None of the above
27 In continuation of the above question what would be the Residential Status under FEMA, 1999 of
branch at Greece?
a. Person resident outside India b. Person resident in India
c. Foreign Citizen d. None of the above
28 Examine with reference to the provisions of the Foreign Exchange Management Act, 1999 the
residential status of the branch mentioned below.
Happy Ltd is an Indian company. It is having registered office at Bengaluru ,India and established
a branch at Melbourne on 1 April 2018
a. Person resident outside India b. Person resident in India
c. Foreign Citizen d. None of the above
29 Examine with reference to the provisions of the Foreign Exchange Management Act, 1999 the
residential status of the branch mentioned below.
Fine goods Ltd, a company incorporated and registered in Adelaide established a branch at
Hyderabad in India on 1 April 2018
a. Person resident in India b. Person resident outside India
c. Foreign Citizen d. None of the above
30 Examine with reference to the provisions of the Foreign Exchange Management Act, 1999 the
residential status of the branch mentioned below.
Fine Goods Ltd, a company incorporated and registered in Adelaide established a branch at
Hyderabad in India on 1 April 2018.
What is status of Hyderabad Branch
a. Person resident outside India b. Person resident in India
c. Foreign Citizen d. None of the above
31 Examine with reference to the provisions of the Foreign Exchange Management Act, 1999 the
residential status of the branch mentioned below.
Quick Ltd has a branch office at Amsterdam which is controlled by its Raipur branch.
a. Person resident in India b. Person resident outside India
3
2
3
2
Examine with reference to the provisions of the Foreign Exchange Management Act, 1999 the
residential status of the branch mentioned below.
Disco Ltd. a company incorporated and registered in Athens established a branch at Jodhpur in
India on 1 January 2018.
a. Person resident outside India b. Person resident in India
c. Foreign Citizen d. None of the above
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33 Mr. Gopal resided in India during the Financial Year 2016-2017 for less than 183 days. He came to
India on 1 April 2017 for employment. What would be his residential status during the financial
year 2017-2018 under FEMA,1999
a. Person resident outside India b. Person resident in India
c. Foreign Citizen d. None of the above
34 Mr. Soham resided in India during the Financial Year 2016-2017. He left India on 1 August 2017
for higher studies for four years. What would be his residential status during the financial year
2017-2018 under FEMA, 1999?
a. Foreign Citizen b. Person resident outside India
b. Person resident in India c. None of the above
35 Mr. Ravi had resided in India during the financial year 2016-17 for less than 183 days. He again
came to India on 1 June, 2017 for business and stayed upto 15 August, 2018. State whether Mr.
Ravi can be considered “Person Resident in India” during the financial year 2017-18
a. Person resident outside India b. Person resident in India
c. Foreign Citizen d. None of the above
36 Mr. Guru resided in India for a period of 150 days during the financial year 2016-2017 and
thereafter went abroad. He came back to India on 1 April 2017 as an employee of a business
organization. What would be his residential status under Foreign Exchange Management Act,
1999 during the financial year 2017-18?
a. Person resident outside India b. Person resident in India
c. Foreign Citizen d. None of the above
37 The residential status of an individual for a particular financial year is determined with reference
to his residence in India in the immediately preceding financial year
a. True
b. False
38 Mr. T is an Indian citizen who has been residing in India since his birth. He left India for
employment in Russia on 25th February 2016. The contract of employment is for 2 years. He
comes back on 24th February 2018. What is his residential status for the financial year 2017-18?
a. Person Resident outside India b. Person resident in India
39 In continuation to the above question what would be residential status for the financial year
2017-18 if he would have gone abroad for higher studies?
a. Person resident in India b. Person Resident outside India
40 No person resident in India shall acquire, hold possess , own or transfer any foreign exchange ,
foreign security or any immovable property situated outside India ,except in accordance with the
Act, or by a general or special permission of RBI.
a. True b. False
41 Any PROI, not being a citizen of Pakistan or Bangladesh, and visiting India: May bring into India
(including from Nepal & Bhutan) max Rs.
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a. 25000 b. 50000 c. 100000 d. 500000
42 Foreign Currency means:
a. All currency excluding Indian Rs b. All currency excluding Indian Rs. & $
c. All currency excluding Rs. and Pakistani Rs d. None of the above
43 The Reserve Bank of India may revoke the authorization of authorized person if it is satisfied that
such revocation
a. will cause peace in the country b. will create employment
c. is in public interest d. will cause inflow of foreign currency
44 An authorised person shall in all his dealings in ------------ comply with such general or special
directions as the Reserve Bank of India may from time to time think fit to give
a. import export b. shares
45 What will authorized person do if any person refuses to make the declaration or to give the
information required by the authorized person or makes only unsatisfactory compliance
therewith?
a. The authorised person shall refuse in writing to undertake the transaction
b. The authorised person shall file a complaint against such person with Police
c. The authorised person shall complete the transaction as usual
46 In continuation of the above question, what if Authorised Person believes that certain
contravention or evasion is contemplated by the person?
a. The authorised person shall file a complaint
against such person with Police
b. The authorised person shall conduct
business as usual
c. The authorised person shall report the matter to
the Reserve Bank of India
d. None of the above
47 What is the penalty where an authorised person contravenes any direction given by the Reserve
Bank under this Act?
a. Fine not exceeding Rs 10000, if it is
continuing then Rs.2000 per day may be
levied
b. Fine not exceeding Rs 1000, if it is continuing
then Rs.200 per day may be levied
c. Fine not exceeding Rs 100000, if it is
continuing then Rs.20000 per day may be
levied
d. Fine not exceeding Rs 10000, if it is
continuing then Rs.20000 per day may be
levied
48 Quantum of Penalty for violation of Sec 13 shall be: if the sum involved is quantifiable:
a. 3x the sum b. 2x the sum
c. 1x the sum d. 10x the sum
49 Quantum of Penalty for violation of Sec 13 shall be: if the sum involved is not quantifiable:
a. upto 1 lakh b. upto 2 lakh
c. upto 3 lakh d. upto 10 lakh
50 Can the Reserve Bank at any time cause an inspection to be made by any specially authorized
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officer in writing in behalf of the business of any authorized person?
a. Yes b. No
51 Compounding of contravention under section 13 shall be done within the time limit of :
a. 180 days of receipt of application by
directorate of enforcement
b. 45 days of receipt of application by directorate of
enforcement
c. 90 days of receipt of application by
directorate of enforcement
d. 65 days of receipt of application by directorate of
enforcement
52 Appeals to Special Director shall be done within ……of receipt of order u\s 17
a. 80 days b. 45 days
c. 70 days d. 100 days
53 If central government or any person is aggrieved by an order made by adjudicating authority it
shall file an appeal to appellate tribunal & appellate tribunal should dispose the appeal within a
period of….days. a. 90 b. 180
c. 45 d. 100
54 Mr. X convicted an offence under the FEMA resulting the penalty of Rs. 65 lakhs. Later he learned
that he can compound under RBI the penalty amount. Can he?
a. Yes, as there is no prison involved b. No, amount 65 lakh exceeds compoundable amount
c. No, As offence can’t be compounded d. None
55 Mr. A was detained under civil imprisonment for contravention of the provisions of FEMA.
Demand was for an amount involving 92 lakh. Such detention shall be for a period of
a. 1 year b. 6 months
c. 3 years d. 10 months
56 Any person detained in civil prison as above may be detained for upto 3 years if demand amount
involved is more than
a. 90 lakh b. 1 crore
c. 50 lakh d. 10 crore
57 Any detained person in execution of certificate shall be released after
a. End of term b. Paying amount in warrant to officer-in-charge
c. appeal d. None of above
58 Mr. X was appointed as an authorized person contravenes directions by RBI and also failed to file
returns by RB . Penalty for such failure and contravention shall be:
a. upto Rs. 10000 and additional Rs.2000
per day for continuing offence
b. upto Rs. 5000 and additional Rs. 1000 per day for
continuing offence
c. upto Rs. 12000 and additional Rs. 2500
per day for continuing offence
d. upto Rs. 10000 and additional Rs. 4000 per day for
continuing offence
59 If any person contravenes any provisions of FEMA or any guideline, rule, notification direction or
Chapter 1 FOREIGN EXCHANGE MANAGEMENT ACT, 1999
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order subject to which an authorization issued shall be penalized when penalty is non-
quantifiable
a. 2 lakh b. 5 lakh
c. 10 lakh d. 15 lakh
60 If any person contravenes any provisions of FEMA or any guideline, rule, notification direction or
order subject to which an authorization issued shall be penalized when penalty is quantifiable:
a. 10 times the amount involved b. 5 times the amount involved
c. 3 times the amount involved d. 15 times the amount involved
61 If the person fails to pay the penalized amount exceeding 1 crore he shall be imprisoned for
a. 10 years b. 3 years
c. 6 months d. 2 months
62 For an offence committed under any provision of act or any rules ,regulations ,notification the
amount of penalty per day continuing offence if the penalty not paid is
a. Rs. 10000 b. Rs. 5000
c. Rs. 2000 d. Rs 1000
63 Mr. A authorized person was appointed by RBI and has set a limit to hold currency upto 20000 $
and such authorized person was holding currency marginally higher @ $ 21000 is the action of
Authorised Person valid?
a. Yes, in case of emergent need b. No, it is violation of RBI directions and punishable
c. Excess of upto 10% permissible d. RBI direction is guideline and not mandatory in nature
64 What is the restriction for possession foreign coins for ordinary person?
a. $ 1000 b. $ 2000
c. $ 3000 d. No limit
65 Person resident in India is permitted to retain aggregate foreign currency only upto
a. $5000 b. Rs 50000
c. Rs 10000 d. $2000
66 Person resident in India but not permanently resident can hold foreign currency acquired by him
outside India without any limit provided the same is disclosed to:
a. Income tax authority b. RBI
c. CG d. Customs authority
67 Realization and repatriation of foreign currency is exempted if such currency is acquired or
received before:
a. 15th August 1947 b. 8th July 1947
c. 26th January 1947 d. 15th July 1950
68 Foreign currency permitted to be retained upto amount of $2000 can be retained by way of:
a. Travellers Cheque b. Foreign Currency Notes
c. Bank Notes d. All of the above
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69 Mr. A returned from Demark to India on 1.5.2010.While flying he took 1000 kroner and could not
use 500 kroner out of 1000. By which date should he deposit that money to authorized person?
a. 30.6.2010 b. 31.5.2010
c. 29.7.2010 d. 31.5.2011
70 A person shall surrender unused portion of Foreign Exchange within…….from the date of it
acquisition to an authorised person
a. 120 days b. 60 days
c. 30 days d. 100 days
71 If the unspent amount is in form of travellers cheque such amount shall be returned within
a. 90 days b. 180 days
c. 100 days d. 60 days
72 What shall be the maximum interest rate payable on advance payment received by an exporter
from buyer outside India?
a. LIBOR +300 basis points b. 3%
c. LIBOR+100 basis points d. 10%
73 Can an exporter refund the amount which unused when the exporter fails to ship the goods after
the period of one year?
a. Yes, with approval of CG b. No
c. Yes only with approval of RBI d. None of the above
74 Which of the following exports require prior approval?
a. Exports of goods on lease, hire etc. b. Export under trade agreement/rupee credit
c. Export of good under special arrangement
between Indian & Foreign Government
d. All of the above
75 Date of export of software in non-physical form under FEMA shall be deemed to be the date of
a. Goods actually exported b. Goods received by buyer
c. Date of RBI approval d. Invoice covering such export
76 When goods are exported to a warehouse established outside India the amount representing
export value shall be paid to authorized dealer in any other case not later than
a. 16 months b. 15 months
c. 14 months d. 12 months
77 When the value of export is not ascertainable at the time of export such export value shall be
a. Cost of Production b. Value as given by authorized dealer
c. Prevailing market price d. Value as specified by RBI
78 Mr. P is running a business of aircraft and its engine and its spare parts. Due to its continual use
the engine of one aircraft got a little damaged result of which he sent it to Germany for repairing
which will be resent within 8 months. Is he required to furnish declaration for such export
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a. No declarations for export for repair b. Yes (declaration since more than 6 months)
79 Mr. X has sent gift to his daughter who resides in Japan of value of Rs. 700000.Is he required to
furnish declaration?
a. Yes (value exceed Rs50000) b. No restriction
80 Which of the following exports don’t require furnishing declaration
a. Goods & software value of 35000 $ b. Gift of Goods of value of more than 600000 Rs
c. Aircraft repairs sent abroad re-import
8 months
d. Trade samples of goods and publicity material
supplied free of payment
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1.11
Answers
Q. No Option No Q. No Option No
1. c 41. a
2. a 42. a
3. e 43. c
4. c 44. d
5. b 45. a
6. a 46. c
7. a 47. a
8. a 48. a
9. a 49. b
10. c 50. a
11. d 51. a
12. a 52. b
13. a 53. b
14. b 54. a
15. b 55. b
16. a 56. b
17. d 57. b
18. d 58. a
19. d 59. a
20. b 60. c
21. b 61. b
22. b 62. b
23. b 63. b
24. a 64. d
25. b 65. d
26. a 66. d
27. b 67. b
28. b 68. d
29. a 69. c
30. b 70. b
31. a 71. b
32. b 72. c
33. a 73. c
34. c 74. d
35. a 75. d
36. a 76. b
37. a 77. c
38. a 78. b
39. b 79. a
40. a 80. d
Chapter 2 INSOLVENCY AND BANKRUPTCY CODE, 2016
© CA Darshan D. Khare
2.1
Chapter 2 : INSOLVENCY AND BANKRUPTCY CODE, 2016
1. When did the Insolvency and Bankruptcy Code 2016 receive the President’s assent: a. 5 August 2016 b. 28 May 2016 c. 5 May 2016 d. 15 June 2016
2. What is the applicability of IBC:
a. Companies incorporated under the Companies
Act, 2013 or under any previous company law.
b. Limited Liability Partnerships incorporated
under Limited Liability Partnership Act, 2008,
c. Partnership firms and Individuals. d. All of the above
3. Who can initiate Corporate Insolvency Resolution Process (CIRP):
a. Only Corporate
Debtor
b. Financial Creditor and
Operational Creditor.
c. Financial Creditor,
Operational Creditor and
Corporate Debtor.
d. Corporate Debtor
and Financial
Creditor.
4. When can CIRP be initiated:
a. The minimum
amount of default is
Rupees Five Lakh or
such higher amount
which shall not exceed
Rupees Two Crore.
b. The minimum
amount of default is
Rupees One Lakh or
such higher amount
which shall not exceed
Rupees One Crore.
c. The minimum amount
of default is Rupees
Ten Lakh or such
higher amount which
shall not exceed
Rupees Three Crore.
d. The minimum amount
of default is Rupees
Eight Lakh or such
higher amount which
shall not exceed
Rupees Three Crore.
5. ‘Default’ under IBC is defined as : a. Non-payment of debt when
whole or any part or instalment
of the amount of debt has
become due and payable and is
not repaid by the debtor or the
corporate debtor.
b. Non-payment of
debt when whole or
part of the payment is
demanded by the
financial or
operational creditor.
c. Non-payment of any
amount, whether in full
or in part, on demand
by the creditors or
concerned authorities.
d. Any
payment to
the creditor
that
subsists.
6. ‘Debt’ under IBC is defined as :
a. Any amount of
money that is owed
or due to any party.
b. A liability or obligation in
respect of a claim which is due
from any person and includes a
financial debt and operational
debt.
c. Any liability arising in
respect of money
advanced by a
creditor to the
debtor.
d. Debts arising out
of loans
advanced by a
financial
institution.
7. ‘Financial Creditor’ under IBC is defined as: a. Any person to whom a financial
debt is owed and includes a person
to whom such debt has been
legally assigned or transferred to.
b. Any person that
has a claim on the
services of a
second party.
c. Any person to
whom a
financial debt is
owed.
d. Any person
who owes
financial debt
to another.
8. ‘Operational Creditor’ under IBC shall be defined as: a. A creditor whose
liability subsists
upto 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.
Chapter 2 INSOLVENCY AND BANKRUPTCY CODE, 2016
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2.2
9. Whether an operational creditor can assign or legally transfer any operational debt to a financial creditor:
a. Yes. However, the
transferee shall be
considered as an
operational
creditor to such
extent of transfer.
b. Yes but the
transferee shall be
considered as a
financial creditor in
relation to such
transfer.
c. No. An operational
creditor cannot assign
or legally transfer any
operational debt to a
financial creditor.
d. No. An operational
creditor can assign or
legally transfer an
operational debt only
to an operational
creditor.
10 Who is a corporate debtor under IBC:
a. Any person that owes
debt to a company.
b. A company that
owes debt to any
person.
c. A corporate person
who owes a debt to
any person.
d. An entity that owes
money to a
financial institution.
11 Who are considered corporate persons under the provisions of IBC:
a. Companies and Limited
Liability Partnerships.
b. Companies and all
Partnership firms.
Companies, Limited
Liability Partnerships
and Trusts.
Companies, all
Partnership firms and
Societies.
12 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.
13 Who is the Regulator under IBC:
a. Reserve Bank of
India.
b. INSOL India. c. Insolvency and
Bankruptcy Board of India.
d. Indian Board for Insolvency
and Bankruptcy.
14 What is the time limit for an operational creditor to initiate insolvency resolution process from the date
of delivering of notice or invoice demanding payment:
a. 7 days b. 10 days c. 14 days. d. 12 days
15 How much is the extension period for completion of insolvency resolution process:
a. 90 days. b. 180 days. c. 120 days. d. 150 days.
16 Who shall declare a moratorium:
a. Insolvency
Professional
b. Insolvency Professional
Agency
c. Adjudicating
Authority
d. Insolvency and Bankruptcy
Board of India
17 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 or
in the possession of the
corporate debtor.
c. Any action to
foreclose, recover
or enforce any
security interest
created by the
corporate debtor.
d. Making sales in the
ordinary course of
business or rendering
services therein
18 Who is an applicant under Section 7 of IBC:
a. Corporate Debtor. b. Financial Creditor. c. Operational Creditor. d. Adjudicating Authority.
Chapter 2 INSOLVENCY AND BANKRUPTCY CODE, 2016
© CA Darshan D. Khare
2.3
19 Can Civil Court enter into the matters of IBC?
a. Yes b. No c. With approval of IBBI d. With approval of AA
20 Which authority can adjudicate for the matters of insolvency resolution for an Individual?
a. NCLT b. RBI c. DRT d. MCA
21 Are the rights of Women and Employees protected under the IBC Act during the Liquidation?
a. No b. Yes c. Partly No d. Partly Yes
22 If the process of IBC is not completed within ............. days it can be extended by.......days.
a. 180, 90 b. 120, 60 c. 90, 60 d. None of the above
23 Which of the following is not purpose of the Act?
a. For the period for
execution of law in a
time bound manner.
b. Promote
Entrepreneurship
c. Increase availability
of credit.
d. Closing down any
business venture
24 The whole process of IBC should be completed within
a. 60 days b. 90 days c. 180 days d. 120 days
25 Is there any provision for speedier process of Corporate Insolvency?
a. Yes b. No c. Can’t Say d. Partly Yes
26 Only ...... has an authority to run debtors business during the moratorium period?
a. Insolvency Professionals b. DRT c. NCLT d. RBI
27 The main feature of Information Utility is to ......... information
a. Collect b. Authenticate c. Collate d. All of the above
28 Which of the following is an Adjudicating Authority in case of an insolvent company?
a. DRT b. NCLT c. DRAT d. RBI
29 Which of the following is Dissolution?
a. Means closing down any
business venture. It
includes everything from
appointment of
Liquidation
b. Is similar to dying of companies in
which the legal identity if company
comes to an end and it ceases to be
a legal person and hence cannot
contract in its own name.
c. Both of above d. None
30 Which of the following is purpose of IBC Act?
a. Promote
Entrepreneurship
b. Increase availability
of credit.
c. Fix time period for execution of
law in a time bound manner.
d. All of the
above
31 The AA can attend the period of Fast Track CIRP beyond 90 days only if supported by ...... of voting share.
a. 50% b. 75% c. 90% d. 60%
32 A person to operational debt is owed and includes any person to whom such debt has been legally
assigned or transferred is.......
a. Financial Creditor b. Operational Creditor c. Corporate Debtor d. KMP
Chapter 2 INSOLVENCY AND BANKRUPTCY CODE, 2016
© CA Darshan D. Khare
2.4
33 Any person to whom a financial debt is owed and includes a person to whom such debt has been legally
assigned or transferred to..............
a. Financial Creditor b. Operational Creditor c. Corporate Debtor d. KMP
34 Which of the following is a related party?
a. A person controlling
more than 30% of
voting rights in
Corporate Debtor.
b. A person controlling
more than 20% of
voting rights in
Corporate Debtor.
c. A person
controlling more
than 25% of voting
rights in Corporate
Debtor.
d. A person
controlling more
than 10% of
voting rights in
Corporate Debtor.
35 Within 7 days of admission or rejection the AA shall.....
a. Communicate order b. Obtain NOC c. Issue Show Cause Notice d. Advertise in News
36 The order of an AA shall be communicated to Operational Creditor & Operation Debtor within....days.
a. 10 b. 14 c. 30 d. 60
37 Which of the following can be termed as bankrupt?
a. (Liabilities >
Assets) +
Unable to pay
debts
b.[(Liabilities > Assets) + Unable to pay
debts] + Corporate Debtor +
Untreated + Insolvency Resolution
Process (Unsuccessful)
c. [(Liabilities > Assets) +
Unable to pay debts]
+ Non-Corporate
Debtor + Untreated
d. None of
the
above
38 Which of the following can be termed as bankrupt?
a. (Liabilities >
Assets) +
Unable to pay
debts
b.[(Liabilities > Assets) + Unable to pay
debts] + Corporate Debtor +
Untreated + Insolvency Resolution
Process (Unsuccessful)
c. [(Liabilities > Assets) +
Unable to pay debts]
+ Non-Corporate
Debtor + Untreated
d. None of
the
above
39 On occurrence of default on Operational Creditor shall first send a demand notice and ...... to Corporate
Debtor.
a. Copy of agreement b. Copy of deed c. Copy of invoice d. Copy of notice
40 The Corporate Debtor shall within ............ of receipt of demand notice bring to notice of Operational
Creditor about existence of dispute.
a. 10 days b. 14 days c. 30 days d. 60 days
41 Which of the following is Corporate Applicant?
a. Corporate
Debtor
b. Individual in charge of Managing
operations & resources of
Corporate Debtor
c. A person having control
& supervision over the
affairs of the Company.
d. All of the
above
42 In which of the following cases related party exists:
a. Private Company in
which director,
partner or manager
hold more than 2% of
PUC.
b. Private Company in
which director,
partner or manager
hold more than 2%
of Net Worth.
c. Public Company in
which director,
partner or manager
hold more than 2%
of PUC.
d. One Person
Company in which
director, partner or
manager hold more
than 2% of PUC.
43 Any person in whom the Corporate Debtor controls more than.... on account of Partnership or voting
agreement.
Chapter 2 INSOLVENCY AND BANKRUPTCY CODE, 2016
© CA Darshan D. Khare
2.5
a. 40% b. 20% c. 30% d. 50%
44 Any person who is associated with Corporate Debtor can be said to be related party when:
a. Having more than 2
directors in common
between the Company
and such person
b. Interchange of Managerial
Personnel between the
Corporate Debtor and
such person.
c. Provision of essential
technical information
to or from Corporate
Debtor.
d. All of the
above
45 The FTCIRP shall be completed within.....days of insolvency commencement date.
a. 30 b. 60 c. 120 d. 90
46 The Related Party shall file an application to.....to extend the period beyond ....days of FTCIRP.
a. RBI, 30 days b. AA, 90 days c. CBI, 100 days d. IT, 120
days
Chapter 2 INSOLVENCY AND BANKRUPTCY CODE, 2016
© CA Darshan D. Khare
2.6
Answers
QUES. ANSWER QUES. ANSWER QUES. ANSWER
1 B 7 A 13 C
2 D 8 B 14 B
3 C 9 A 15 A
4 B 10 C 16 C
5 A 11 A 17 D
6 B 12 B 18 B
19 B 20 C 21 B
22 A 23 D 24 C
25 A 26 A 28 B
29 B 30 D 31 B
32 B 33 A 34 B
35 A 36 B 37 C
38 B 39 C 40 A
41 D 42 A 43 B
44 D 45 D 46 B
Chapter 3 FOREIGN CONTRIBUTION (REGULATION) ACT, 2010
© CA Darshan D. Khare
3.1
Chapter 3 : FOREIGN CONTRIBUTION (REGULATION) ACT, 2010
Q1.
FCRA 2010 regulates:
a. Foreign Hospitality b. Foreign Contribution c. Both a. and b. d. Neither: as they are
regulated by FEMA
Q2.
FCRA applies to:
a. Whole of India b. Indian Citizens
Outside India
c. Branches of Indian Registered Co’s outside India
d. All of these
Q3.
Minc Inc. of USA had subsidiaries in the European Union at Germany and France having less than 5% of
its turnover contributed from these regions: Is it an MNC.
a. Yes as turnover is not a criteria for such a
determination of MNC status
b. No, as turnover is below specified limits u/s 2(g)
Q4.
Mr. Freeman of Delhi was gifted for his personal use, a pen worth 30,000/- by the organizers of the
event which he was an invitee for: Is it a Foreign Contribution?
a. Yes, amount
exceeds 25000/-
b. Yes, contribution
is made by a
foreign source
c. No, is in nature of
gift for personal
use
d. No, as gift by a professional
body not classified as
foreign source
Q5.
Mr. Chachaji (US citizen) gave Ms Bhateeji who is his niece, US Dollars just before she left for India
after having stayed on vacation in US for a month: Is this a Foreign Contribution?
a. Yes u/s 2(h) all
conditions are fulfilled
b. No, transfer of
currency between
relatives
c. Yes, as transfer takes
place outside India
d. No, as it is without
consideration
Q6.
Foreign Contribution means donation delivery or transfer by foreign source of :
a. Article (not gift for personal use) >
25000/-
a. Currency b. Security c. All of these
Q7.
Mr. Giver gave gift to Mr. Taker (curator of Baseball Museum of Mumbai) a rare signed Lou Gehrig T-
Shirt to be placed at the Baseball Museum: Is this a Foreign Contribution
a. Not a Foreign
Contribution being a gift
specifically excluded
from definition
b. Is a Foreign
Contribution if
amount >
25000/-
c. Not a Foreign
Contribution as it
is Not For Sale but
museum/storage
d. Is Foreign Contribution
irrespective of
monetary value thereof
Q8.
Maggi who received a BMW as a gift from her uncle (US citizen) for her personal use: Used the same
to provide rides to customers on OLA Ride-hailing service : Is the Income derived from the same a
Foreign Contribution
a. Yes, as income derived
from a Foreign
Contribution (Car) shall
be Foreign Contribution
as well
b. No, as Income
derived is not from
Foreign
Contribution (as
car is gift for
personal use)
c. No, as income derived
from Foreign
Contribution doesn’t qualify as Foreign
Contribution too
under Act
d. Specific
exemption in
given case exists
for luxury cars,
and hence is
exempt
Q9.
Which of these are ‘Foreign Source’: a. Government of Foreign
Country
b. International
Monetary Fund
c. Both a. and b. d. Neither a. nor b.
Chapter 3 FOREIGN CONTRIBUTION (REGULATION) ACT, 2010
© CA Darshan D. Khare
3.2
Q10.
Which of these are ‘Foreign Source’: a. Trade Union of Farmers of
USA, Registered in USA
b. Unregistered Trade Union
of Soy Growers in USA
c. Both a.
and b.
d. Neither a. nor
b.
Q11.
Which of these are ‘Foreign Source’: a. Club exclusively made up of
NRI’s, formed and registered outside India
b. Club exclusively made up of
NRI’s formed and registered in
India
c. Both a.
and b.
d. Neither a.
nor b.
Q12.
Which of these are Foreign Source:
a. Club exclusively made up of
Indian Citizens, formed and
registered outside India
b. Club exclusively made up of Indian
Citizens, formed and registered
inside India
c. Both a.
and b.
d. Neither
a. nor
b.
Q13.
Which of these are Foreign Source:
a. Company exclusively made up
of Foreign Citizens, formed
and registered outside India
b. Company exclusively made up of
Foreign Citizens, formed and
registered inside India
c. Both a.
and b.
d. Neither
a. nor
b.
Q14.
Arnab, an editor of Never-ever Magazine, a bi-monthly registered publication magazine, with national
circulation, took money from Foreign Source: Is this permissible u/s 3 of FCRA?
a. Yes, as it’s a magazine and not a
registered
newspaper
b. No, as no distinction is
made between a
Magazine or any other
publication u/s 3 of FCRA
c. Yes, as it is not a
daily issue and
prohibition applies
to daily issues only
d. No, as it is a
nationally
circulated
magazine
Q15.
Mr. Hari Patti, accepted funds from a MNC. Mr. Hari is a Government Servant. Considering that there
are no issues related to the MNC pending for Mr. Hari’s approval as a Government Servant: Is such acceptance of money permissible
a. Yes, Mr. Hari is not expressly
prohibited from such
acceptance
b. No. Mr. Hari is
expressly prohibited
from such an act
c. Yes, as there is no conflict or issue of
bribe as there is no file requiring his
assent pertaining to MNC
Q16.
Mr. Arnab, an editor of Times Now News Channel for its Audio Visual News show: Can he accept
Foreign Contribution?
a. Yes, as there is no
specific prohibition on
editors in case of
News transmitted
through electronic
mode but only on the
Company/Association
b. No, as editors for
the aforesaid
case are also
prohibited u/s 3
c. Yes, as prohibition
exists only on
editors of
registered
newspapers and
not on News
Channel
d. Yes, as there is no
specific prohibition on
editors in case of News
transmitted through
electronic mode but
only on the
Company/Association
Q17.
Mr. Ajab, PRI accepts Perfume bottle worth a 2 lakh on behalf of Mr. Arnab who is editor of a
registered newspaper: Is it permissible?
a. Yes, this is permissible as there is no prohibition
on Editor/Person u/s 3(1) to let PRI accept
Foreign Contribution on their behalf
b. No, Acceptance of Foreign Contribution by PRI
on behalf of an Editor/Person u/s 3(1) is
prohibited expressly
Q18
Mr. Ajab, PRI accepts perfume bottle worth a 2 lakh from a foreign source to be given to Mr. Ghajab,
who he knows will pass over the same to Mr. Arnab. Mr. Arnab is an editor of a registered newspaper:
Chapter 3 FOREIGN CONTRIBUTION (REGULATION) ACT, 2010
© CA Darshan D. Khare
3.3
Is this permissible?
a. Yes, this is permissible as
there is no prohibition on PRI
to deliver accepted Foreign
Contribution to a person
other than Editor/Person u/s
3(1), whether or not that
person eventually transfers to
the Editor/Person u/s 3(1)
b. No, this is not
permissible as there is
prohibition on PRI to
deliver accepted
Foreign Contribution to
a person if such person
then transfers the same
to Editor/Person u/s
3(1)
c. Yes, this is permissible as there is
no prohibition on PRI to deliver
accepted article to a person other
than Editor/Person u/s 3(1),
whether or not that person
eventually transfers to the Editor
/Person u/s 3(1) . Prohibition
applies to a delivery of currency
only
Q19.
Mr. Ajab, PRI accepts perfume bottle worth 2 lakh from a foreign source to be given to Mr. Ghajab,
who delivered the same to Mr. Arnab. Mr. Ajab was not aware that Mr. Ghajab will deliver same to
Mr. Arnab. Mr. Arnab is an editor of a registered newspaper:
a. Yes, this is permissible as
there is no prohibition on
PRI to deliver accepted
Foreign Contribution to a
person other than
Editor/Person u/s 3(1),
whether or not that person
eventually transfers to the
Editor/Person u/s 3(1)
b. No, this is not
permissible as there is
prohibition on PRI to
deliver accepted Foreign
Contribution to a person
if such person then
transfers the same to
Editor/Person u/s 3(1)
c. Yes, this is permissible as there is
no prohibition on PRI to deliver
accepted article to a person other
than Editor/Person u/s 3(1),
whether or not that person
eventually transfers to the
Editor/Person u/s 3(1). Prohibition
applies to a delivery of currency
only
Q20 Mr. Ajab, PRI accepts currency from a foreign source to be given to Mr. Ghajab, who delivered the
same to Mr. Arnab. Mr. Ajab was not aware that Mr. Ghajab will deliver same to Mr. Arnab. Mr. Arnab
is an editor of a registered newspaper: Is there any prohibition for the same?
a. Yes, expressly
prohibited u/s
3(2)(b)
b. No, as prohibition exists in case
where the person is aware that the
transferee will further transfer to
Person referred u/s 3(1)
c. No Prohibition, irrespective of
whether or not such PRI is aware
that the transferee will further
transfer to Person referred u/s 3(1)
Q21. Mr. Michael Bloomberg, a U.S Citizen resident in India who operates the Bloomberg business TV
channel operations in India, pays to Mr. Arnab, Editor of a daily news show on Bloomberg business TV,
a salary of $200000/- . Mr. Michael received such a payment from parent Company Bloomberg Inc of
USA. Is this a payment made in violation of Sec 3?
a. Yes, as payment is
made to a person u/s
3 from Foreign
Source amounting to
Foreign contribution
b. No, as payment is made by a PRI
to a person u/s 3 after receiving
such amount from Foreign
Source and for the purpose of
Salary which is specifically
excluded.
c. No, as payment is made by
person resident in India, hence
source ceases to be a Foreign
Source and hence transaction
done even with a person u/s 3
shall be permitted.
Q22.
Mr. Advertiser, an Indian Citizen resident outside India who operates advertising agency in India, pays
to Times Now, $200000/- for Ads to be run on that network. Ads are run for Tesla Inc who paid the
money to Mr. Advertiser. Is this a payment made in violation of Sec 3?
a. Yes, as payment is
made to a person
u/s 3 from Foreign
Source amounting
to Foreign
contribution
b. No, as payment is made by a
Citizen resident outside India to a
person u/s 3 after receiving such
amount from Foreign Source and
for the purpose of ordinary
business transaction is specifically
excluded.
c. Yes, as payment is made by Citizen
Resident outside India, hence
source is a Foreign Source and
hence transaction done even with
a person u/s 3 shall be violation as
no specific exclusion is given.
Chapter 3 FOREIGN CONTRIBUTION (REGULATION) ACT, 2010
© CA Darshan D. Khare
3.4
Q23.
Lockheed Martin Aviation Inc of USA has an appointed agent named Mr. Unlock. This agent deals with
issues pertaining to the Government of India. Mr. Unlock is a Person Resident in India. All Lockheed
Martin Aviation payments to GOI are made through Mr. Unlock. Does this violate Sec 3?
a. Yes, as payment is
made to a person u/s
3 from Foreign
Source amounting to
Foreign contribution
b. No, as payment is made by a PRI
and such payments are made as
agent for Foreign Source, to the
CG/SG, and hence is specifically
excluded
c. No, as payment is made by a PRI
who is acting as an independent
agent, hence payment made to
CG/SG shall be payment made by
Indian source not Foreign Source.
Q24.
Judge Brett Kavanaugh, received from his relative a US citizen certain amount of money. Is the judge
then in violation of Sec 3?
a. Yes, as he has received
Foreign Contribution and
being a Judge is in direct
violation of Sec 3
b. Yes, as the receipt is from a
foreign citizen so being a
relative is immaterial in
application of Sec 3
c. No, as being a receipt from a
relative Judge shall be
excluded from Application of
Sec 3
Q25. Would Judge Brett be in violation if instead of money he received Security instead?
a. Yes, as the prohibition is applicable
based of the Foreign Source and Foreign
Contribution, both of which are present.
b. No as even though Judge is prohibited from accepting
Foreign Contribution from Foreign Source, the same
is condoned (allowed) if such is given by a relative
Q26.
Would Judge Brett be in violation if instead of Judge Brett his wife Ashley who is an Indian Citizen but
resident outside India received the currency on Judge Brett’s behalf?
a. Yes, as exemption to
relative is available only
for people referred to in
Sec 3(1) and not 3(2).
b. No, Acceptance of Foreign Contribution by Citizen of India Resident
outside India on behalf of an Editor/Person u/s 3(1) is prohibited
expressly, but since the amount is being received on behalf of
recipient u/s 3 and from a relative, same is excused specifically.
Q27.
Mr. Prakash fell ill on US trip and received Foreign Hospitality from the US Government by virtue of
medical aid. Mr. Prakash is a Government Servant and hence prohibited u/s 6. What shall be his
course of action?
a. Inform CG
within 60
days
b. Inform CG within 60
days if amount
exceeds Rs. 100000
c. No need to inform CG as emergent
medical aid received is outside
purview of Sec 6 prohibition
d. Inform SG
within 30 days
Q28. ‘Foreign Hospitality’ means offer made in: a. Cash only b. Kind only c. Both a. and b. d. Either a. or b. exclusively at a time
Q29. ‘Foreign Hospitality’ includes providing costs of: a. Foreign Travel b. Boarding Lodging Transport
on Foreign Travel
c. Medical Treatment
on Foreign Travel
d. All of the above
Chapter 3 FOREIGN CONTRIBUTION (REGULATION) ACT, 2010
© CA Darshan D. Khare
3.5
Answers
Q. NO ANS.
NO
Q. NO ANS.
NO
Q. NO ANS.
NO
Q. NO ANS.
NO
Q. NO ANS.
NO
1. c 2. d 3. a 4. c
5. a 6. d 7. b 8. q 9. c
10. C 11. a 12. a 13. c 14. a
15. B 16. b 17. b 18. c 19. c
20. b 21. b 22. b 23. b 24. c
25. b 26. b 27. b 28. c 29. d
Chapter 4
SECURITISATION & RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT
OF SECURITIES INTEREST ACT, 2002
© CA Darshan D. Khare
4.1
Chapter 4: Securitisation & Reconstruction of Financial Assets and
Enforcement of Securities Interest Act, 2002
1. Whether any Stamp duty is levied on the transfer of security interest from the Banks/Financial
Institution to Asset Reconstruction Company?
A. Depends from state to state B. Stamp duty is exempted C. Levied if the amount of transfer exceeds 100
Crore
D. Rs. 100 on every Rs 1,00,000 of security
interest
2. If the registration certificate of the ARC is cancelled, in how many days can it make an application to
the Central Government (Ministry of finance)?
A. 30 days B. 60 days
C. 90 day D. 180 days
3. The Asset Reconstruction company can make an application against the RBI within 30 days of RBI
cancelling its registration certificate to______________
A. Governor of RBI B. Government of India
C. Central Government (Ministry of Finance) D. Prime Minister
4. Any dispute arising between Bank or financial institute & ARC or QIB shall be resolved by making an
application to
A. National Company Law Tribunal B. High Court
C. Arbitrator under Arbitration & Conciliation Act,1996 D. Regional direct
5. The Asset Reconstruction company after acquiring the financial assets shall replace __________in
terms of obligations, terms and conditions
A. Secured Creditor B. Bank or financial Institution
C. Special Purpose Vehicle D. Guarantor
6. An Asset Reconstruction company Works as
A. Agent, manager &
receiver
B. Principal, manager
& receiver
C. Manager, receiver
& administrator
D. Gent, manager
& obligator
7. On the basis of period for which the asset remained non-performing assets are classified into 3
categories_______
A. Standard, sub-
standard and
default assets
B. Sub-standard,
doubtful and loss
assets
C. Standard, doubtful
and loss assets
D. Standard, doubtful
and irrecoverable
assets
8. Type of registrations which is required by ARC
A. Registration under
Companies Act
and RBI
B. Only
Registration
under RBI
C. Only to be formed
as Company under
Companies Act
D. Can start the business of
ARC just by registering with
SEBI and issuing securities.
9. If there are more than one borrower, how should the demand notice be served
A. Demand notice must be
served only on those
borrowers whose
borrowing is more than
B. Demand notice
must be served
on any one of
the borrowers
C. Demand notice must
be served on the
person whose name
appears first in the
D. Demand
notice must
be served on
all borrowers
Chapter 4
SECURITISATION & RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT
OF SECURITIES INTEREST ACT, 2002
© CA Darshan D. Khare
4.2
40% of the debt list
10. If the payment is not made by the borrower in the prescribed time after receipt of notice, which of the
following steps cannot be taken by the secured creditor:
A. Take possession of
the secured assets of
the borrower
including the right to
transfer by way of
lease, assignment or
sale for realising the
secured asset
B. Appoint any person
(manager) to
manage the secured
assets, the
possession of which
has been taken over
by the secured
creditor
C. To sell the assets of the
borrower without further
procedures that is in the
possession of the secured
creditor and utilize the
amount against the
amount due by the
borrower
D. Takeover
the
managem
ent of
business
of the
borrower
11. What is the purpose of Central Registry
A. Registration of transaction
of securitisation and
reconstruction of financial
assets and creation of
security interest
B. Storehouse of
information
relating to
securitized
assets
C. Registration of
information relating
to secured creditors
and related
borrowers
D. Collection of
information
related to
securitization
cases
12. Which of the following is not a security interest
A. Any security
Interest created
in agriculture
land
B. Any security interest
for securing repayment
of any financial asset
exceeding Rs. 1 Lac
C. Any
unconditio
nal sale
D. Any case in which the amount
due is more than 20% but less
than 30% of the principal
amount and interest thereon
13. Which of the following is not a condition that is considered by the RBI in case of application for
registration or carrying on business by an Asset Reconstruction Company (ARC):
A. that the ARC has
not incurred
losses in any of
the three
preceding
financial years
B. that the
directors of ARC
have not
entered into
related party
transactions
C. that the directors of ARC
have adequate
professional experience in
matters related to
finance, securitisation
and re-construction
D. That a sponsor of an
ARC is a fit and
proper person in
accordance with the
criteria issued by RBI
14. When does an asset become non-performing
A. When the
instalments and/or
interest is not paid
for a period
exceeding 60 days
B. When the
instalments and/or
interest is not paid
for a period
exceeding 120 days
C. When the
instalments and/or
interest is not paid
for a period
exceeding 90 days
D. When the
instalments and/or
interest is not paid
for a period
exceeding 180 days
15 In case of joint financing under this Act, a creditor can
A. Take any
action
independentl
y
B. Take action only when it
is agreed upon by
creditors holding 60% of
the amount outstanding
on record date
C. Take action only when it
is agreed upon by
creditors holding 40% of
the debt outstanding as
on that date
D. Take action with
the permission
of all the other
creditors involve
16 What is the time limit within which any person aggrieved by any measure taken by secured creditors
file an application to the Debt Recovery Tribunal:
Chapter 4
SECURITISATION & RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT
OF SECURITIES INTEREST ACT, 2002
© CA Darshan D. Khare
4.3
A. Within 45 days from
the date on which such
measure had been
taken
B. Within 30 days
from the date on
which such
measure had been
taken
C. Within 15 days
from the date on
which such
measure had
been taken
D. Within 60 days
from the date on
which such
measure had
been taken
17. Under the provision of SARFAESI Act 2002, where a transaction of securitisation is registered
A. Registrar of
Companies
B. Registrar of Firms C. Registrar of
Assurances
D. Registrar of
Central Registry
18 In the process of securitisation the non-liquid financial assets (NPA) are converted into marketable
securities in the form of:
A. Share B. Debenture C. Pass through certificates D. Receipts
19 At the time of take over the bad loans from 3 banks it is found that these banks have filed suits in
different DRTs. Securitisation company wants to get these cases in one DRT, which can be permitted
by:
A. Central Govt. B. Supreme Court C. High Court D. DRAT
20 What is the name of Central Registry formed under SARFAESI Act, 2002
A. Central Registry of
Securitisation Asset
Reconstruction and
Security Interest
(CERSAI)
B. Central Registry of
Secured Asset
Reconstruction and
Security Interest
(CERSAI)
C. Central Registry of
Securitisation Asset
Reconstruction and
Security Asset
Interest (CERSAI)
D. None of the
Above
21. Before which of the following can an asset reconstruction company file an application for enforcement
of its security interest:
A. Debt Recovery
Tribunal
B. High Court C. District Court D. National Company Law
Tribunal
22. An application under Section 5A of the SARFAESI Act for transfer of applications pending before two or
more Debt Recovery Tribunals may be filed by an Asset Reconstruction Company before
A. High Court B. National Company Law
Appellate Tribunal
C. Special Court D. Debt Recovery
Appellate Tribunal
23. When a secured creditor takes over the management of business of a borrower, he may appoint:
A. As many persons as it thinks
fit to be the
directors/administrators of
the business of that
borrower, as the case may be
B. As many persons as it
thinks fit to be the
registered valuers of
the business of that
borrower
C. The auditors
of the
business of
that
borrower
D. The liquidator
who shall take
over the
liquidation
proceedings
24 Prior approval of RBI is not required in the following case to an ARC
A. Chang
e in its
name
B. Any substantial change in the
management , including appointment of
any director, managing director, or chief
executive officer
C. Enforcement of
security interest
D. Change of
location of its
registered
office
25 One of the following ground is not the criteria for cancellation of Registration Certificate of ARC
A. Ceases to carry on the B. Has failed to comply C. Fails to maintain the D. has incurred
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business of
securitization or asset
reconstruction company
with the conditions
specified by RBI
accounts in
accordance with the
requirement of the Act
loss in the
preceding
financial year
26. RBI has power to determine policy and issue directions to the ARC in particular or it should be uniform
for all the ARC’s
A. RBI has power to issues
such directions only
generally, uniformly for
the all the ARC’s
B. RBI can issue
directions only
to particular
ARC
C. RBI can issue in public interest to
the ARC’s and also to the ARC in particular directions and
determine policies
D. None of
the
above
27 Which of the following is not the Pre-conditions for enforcement of security interest
A. There should
be a default
in repayment
of secured
debt
B. The account in
respect of
such debt is
classified as
NPA
C. Notice in writing is
issued to the borrower
to discharge its liabilities
in full within 60 days
from the date of notice
D. There is no mandatory
requirement for borrower
liability to a secured
creditor to be under a
security agreement
28. Can director or managing director or manager or any other person incharge of management can claim
to tribunal for recovery of compensation for loss of its office:
A. It can claim for compensation if the director,
managing director, manager or person incharge is
not guilty of any fraud
B. Director or managing director or
manager or any other person incharge
of management cannot claim
compensation for loss of office
C. Director or managing director or manager or any other person
incharge of management cannot claim compensation for loss of
office but has the right to recover from the business of the
borrower, moneys recoverable otherwise than by way of such
compensation
D. Can make an
application to Tribunal
within 30 days to claim
for loss of office
29. The Act is extends to
A. Whole of India B. Whole of India
except Jammu
and Kashmir
C. Whole of India but excluding
the states of J&K, Telengana
and West Bengal
D. Whole of India
except the Union
Territories
30. The time-limit within which the DRT is supposed to dispose off the application
A. As
expeditiously
as possible
B. Within 60 days
from the date
of application
C. Within 60 days from the date of
application but can be extended
to max of 4 months for reason to
be recorded in writing
D. Within 180
days of the
date of
application
31. An asset reconstruction company shall not commence the business of securitisation unless
A. It has obtained a certificate of
registration
B. It has obtained a certificate of
registration
C. A and B D. A or
B
32. RBI has specified that the Net Owned Fund for Asset Reconstruction Companies shall be minimum ------
------- on an ongoing basis with effect from 28 April,2017
A. Rs 50 Crore B. Rs 100 crore C. Rs. 150 crore D. No such limit
33. An asset reconstruction company existing on the commencement of this Act, shall make an application
for registration to the RBI before the expiry of -------- from such commencement
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A. 30 days B. 120 days C. 3 months D. 6 months
34. Before granting a certificate of registration , the RBI shall itself satisfy that-------
A. Such company has
not incurred losses in
any of 3 preceding
financial years
B. That no director of such
company has been
convicted of any offence
involving moral
turpitude
C. that such company has
complied with or is in a
position to comply
with prudential norms
specified by the RBI
D. All of
the
Above
35. Before granting a certificate of registration , the RBI shall itself satisfy that-------
A. That the directors of
such company have
adequate professional
experience in matters
related to finance ,
securitisation and
reconstruction
B. That such
company has
complied with
such conditions as
may be specified
in the guidelines
issued by the RBI
C. That a sponsor of an asset
reconstruction company is a
fit and proper person in
accordance with the criteria
as may be specified in the
guidelines issued by the RBI
for such persons
D. All of
the
above
36. Sponsor means---
A. Any person holding
not less than 10%
of the paid up
equity capital of an
asset
reconstruction
company
B. Any person holding
not less than 20% of
the paid up equity
capital of an asset
reconstruction
company
C. Any person
holding more than
20% of the paid up
equity capital of
an asset
reconstruction
company
D. Any person
holding any
amount of the
paid up equity
capital of an asset
reconstruction
company
37. Can an asset reconstruction company appoint any director on the board of directors of the asset
reconstruction company
A. No B. Yes, on obtaining prior approval of RBI
38. Every asset reconstruction company shall obtain prior approval of RBI for change of location of its
registered office
A. True B. False c. Partly True d. Partly False
39
High ltd. is an asset reconstruction company, of which certificate of registration was cancelled. Which
authority can cancel the registration?
A. Supreme court B. High Court C. RBI D. Any of the above
40 Mudra Ltd. is an asset reconstruction company. This company has failed to comply with any direction
issued by the RBI under the provisions of this Act. What action will RBI take now?
A. No action B. Cancellation of certificate C. Suspension of certificate D. None of the above
41. M Ltd. is an asset reconstruction company. This company ceased to carry on the business of
securitisation under the provisions of this Act. What action will RBI take now?
A. Cancellation of certificate B. Suspension of certificate
42. The RBI may cancel the certificate of registration of any asset reconstruction company, without giving
any opportunity being heard, if it is of opinion that the delay in cancelling the certificate of registration
shall be prejudicial to the public interest or the interest of the investors of such company.
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A. True B. False
43. The RBI may cancel the certificate of registration of any asset reconstruction company, without giving
any opportunity being heard, if it is of opinion that the delay in cancelling the certificate of registration
shall be prejudicial to the public interest or the interest of the investors of such company.
A. High court B. Appellate Tribunal C. State Government D. Central Government
44. What is the time limit for filing an appeal by the asset reconstruction company?
A. 15 days B. 30 days C. 45 days D. 60 days
45. Any document executed by any bank or financial institution in favour of the asset reconstruction
company acquiring financial assets for the purpose of asset reconstruction shall be--------------
A. Liable to pay stamp
duty
B. Exempted from stamp
duty
C. Any of the above D. None of the
above
46. Under the provision of SARFAESI Act 2002, where a transaction of securitisation is registered
A. Registrar of
Companies
B. Registrar of
Assurances
C. Registrar of Firms D. Registrar of
Central Registry
47. Under section 14,compulsory filing of ------------- by the secured creditor through their authorised
officer with the District magistrate to take possession of the secured assets
A. Certificate B. Affidavit C. Report D. None of the above
48. Where the sale of an immovable property, for which a reserve price has been specified, has been
postponed for want of a bid of an ------------------- such reserve price, it shall be lawful for any officer of
the secured creditors to bid for the immovable property on behalf of the secured creditor at any
subsequent place
A. Amount not less than B. Amount not more than C. Amount equal to
49 Where the secured creditor is declared to be the purchaser of the immovable property at any
subsequent sale, the amount of the purchase price shall be ------------------- of secured creditor.
A. adjusted towards the
selling price
B. adjusted towards the amount of
the claim
C. adjusted towards the
amount of auction
50 Any amount which is received by the secured creditor shall be applied , firstly, in payment of such costs
and secondly , in discharge of the dues of the -----------, and if any amount remains after such
payments, such amount shall be paid to the borrower
A. secured creditor B. unsecured creditor C. liquidator
51 Where dues of the secured creditor are not fully satisfied with the sale proceeds of the secured assets,
the secured creditor may file an application to the -------- for recovery of the balance amount from the
borrower.
A. Debts recovery
appellate tribunal
B. State government C. Debts recovery
tribunal
D. Central
government
52. No act of the CMM or DM be called in question in any court or before any authority
A. True B. False
53. The act allows taking the matter to high courts only in some matters related to the implementation of
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the act in Jammu & Kashmir
A. True B. False
54. The Jammu and Kashmir High Court shall not entertain any appeal by the borrower unless the
borrower deposits with the Jammu and Kashmir High Court,------------------- due from him as claimed by
the secured creditor or determined by the court of District Judge, whichever is less.
A. 20 B. 25 C. 50 D. 40
55. The Jammu and Kashmir High court may for the reasons to be recorded in writing, reduce the amount
it be deposited by the borrower to such amount as the Jammu and Kashmir High Court may deem fit,
but such amount shall not be less than 30%
A. True B. False
56 The particulars of every transaction of securitisation, asset reconstruction or creation of security
interest shall be filed , with the --------------- in the manner and on payment of such fee as may be
prescribed
A. High Court B. State Government
C. Central Government D. Central Registry
57 It shall be the duty of ------------ , as the case may be , to send to the Central Registrar , the particulars of
modification of security interest
A. Asset Reconstruction Company B. Bank C. Financial Institution
58
The asset reconstruction company shall within 30 days give intimation of such payment or satisfaction
in full of the security interest to the ------------
A. .High Court B. State Government C. Central Government D. Central Registrar
59 The particulars of securitisation entered in the Central Register shall be open during business hours for
inspection by ------- on payment of prescribed fees
A. Director B. Any Person C. Central Registrar D. Concerned Bank
60 Debenture is an ---------------
A. Capital B. Type of bonds C. Acknowledgement of debt
61. the management of business of a borrower is taken over by a secured creditor , the secured creditor
may appoint as many person as is thinks fit to be the ---
A. Directors ,in case the
borrower is a
company;
Administrator of the
business of the
borrower ,in any other
case
B. Administrators ,in
case the borrower is
a company;
Directors, of the
business of the
borrower ,in any
other case
C. Central Registrar ,in
case the borrower is a
company;
Administrator of the
business of the
borrower ,in any other
case
D. None of the
above
62 In addition to the above question, how the above appointments shall be made?
A. By sending circular to the
concerned person
B. By telephonic
conversation
C. By publishing in English and
vernacular newspaper
63 On publication of such above notice, following consequences shall follow:
A. Any contract of B. All the properties of the C. All of the D. None of the
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management between
the borrower and any
director or manager shall
be deemed to be
terminated
business of the borrower
shall be deemed to be in the
custody of the directors
appointed by the secured
creditor
above above
64 On realization of his debt in full, the secured creditor shall-------------
A. Proceed for the winding up B. Appoint any person to be a director
C. Restore the management to the borrower
D. Control interest in the management
65 If any secured creditor jointly with other secured creditors has converted part of its debt into shares
of a borrower company and thereby acquired controlling interest in the borrower company , such
creditors shall not be liable to restore the management of the business to such borrower
A. True B. False
66 Section 16 of the said Act disentitles any director, manager or person in charge of the borrower from-
--------------
A. receiving any compensation for premature
termination of his contract with the borrower
B. paying any compensation for premature
termination of his contract with the
borrower
C. waiving off any compensation for premature
termination of his contract with the borrower
D. accepting any compensation for
premature termination of his contract
with the borrower
67 The DRT may extend the said period of 60 days , that the total period of pendency of the application
shall not exceed ----------
A. 60 days B. 90 days
C. 1 month D. 4 months
68
In the case of a borrower residing in the State of Jammu and Kashmir , the application under section
17 shall be made to the------------ in that state having jurisdiction over the borrower which shall pass
an order on such application
A. Court of District Judge B. High Court
C. Central Registrar D. Any Of Above
69 No appeal shall be entertained unless the borrower has deposited with the Appellate Tribunal 50% of
the amount of debt due from him, as claimed by the ------------
A. secured creditors or determined by the Debts
Recovery Tribunal , whichever is more
B. secured creditors or determined by the
Debts Recovery Tribunal
Secured creditors or determined by the Debts Recovery Tribunal, whichever is less.
70 Where a caveat has been lodged, such caveat shall not remain in force after the expiry of the period
of 90 days ---------------- unless the application or appeal has been made before the expiry of the
period.
A. from the date on which it was lodged B. from the date on which it was served
71 What would be the location of the head office of Central Registry?
A. Delhi B. Chennai
C. At such place as the Central Government may specify D. Mumbai
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72 Central Registry of Securitization Asset Reconstruction and Security Interest of India is a ----------------
with Government of India having a shareholding of 51% by the Central Government and select public
sector banks and the national housing bank also being shareholders of the company
A. Government of India Company licensed
under section 8 of the Companies Act, 2013
B. Charitable trust under section 8 of the
Companies Act,2013
C. Public Company
73 The Central Government may by notification appoint a person for the purpose of registration of
transactions relating to securitization, reconstruction of financial assets and security interest created
over properties who shall be known as the -----------
A. Administrator B. Secured Creditor
C. Central Registrar D. Any of the above
74 A record called Central Register shall be kept at the head office of the Central Registry for entering the
particulars of the transactions relating to –
A. Securitization of the financial assets
B. Creation of security interest
C. Reconstruction of the financial assets
D. All of the above
75 Section 24, provisions relating to modification of security interest applies whenever
A. The terms or conditions of any security
interest registered under chapter IV are
modified
B. The extent or operation of any security interest
registered under chapter IV is modified
C. Both of the above D. None of the above
76 The particulars of such above modifications are to be sent to the Central Registrar under this Act.
Whose duty is it to send to the Central Registrar
A. ARC or the secured creditor B. Borrower
77 Can inspection of Central Register maintained in electronic form be done by any person?
A. Yes B. No
78 Where the CG is satisfied that there was an omission to file with the Central Registrar , intimation of
satisfaction of security interest under section 25; and such omission was accidental it is just and
equitable to grant relief the CG may direct the time for such filing shall be extended.
A. True B. False
79 If any person contravenes or attempts to contravene the provisions of this Act, he shall be punishable
with-----
A. Imprisonment which may extend to 1 year B. Fine
C. Fine and imprisonment D. Any of the above
80 No court shall take cognizance of any offence punishable u/s 27 in relation to the non-compliance with
the provisions of section 23 or 24 or 25 or 28 or 29 or any other provisions of the Act otherwise than
an exception
A. True False
81 Where any ARC or any person fails to comply with any direction issued by the RBI under this Act,
penalty is imposed---
A. Not exceeding Rs. 1 crore or twice the B. Not exceeding Rs. 50 lakh or twice the amount
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amount involved in such failure, whichever is
more
involved in such failure, whichever is more
C. Not exceeding Rs. 1 crore or twice the
amount involved in such failure, whichever is
less
D. Not less than Rs. 1 crore or twice the amount
involved in such failure, whichever is more
82 Any penalty imposed under section 30A shall be payable within a period of ----------
A. 15 days B. 30 days
C. 45 days D. 60 days
83 What if penalty is not paid within the specified period
A. Cancellation of registration B. Postponement of registration
C. Interest is to be paid with penalty D. None of the above
84 A person in default aggrieved by an order of Adjudicating authority imposing penalty may within a
period of 30 days from the date on which such order is passed prefer an appeal to the-------------
A. High court B. Tribunal
C. Appellate Authority D. Central Government
85 Does an Appellate authority has a right, by an order, stay the enforcement of the order passed by the
adjudicating authority u/s 30 A?
A. Yes B. No
86 What is the consequence where it is found that statement on oath made by the person is false in
material particulars?
A. Fine B. Imprisonment
C. Personally liable to the Reserve Bank D. None of the above
87 In what cases are the provisions of the Act not applicable?
A. Any security interest created in
agricultural land
B. Any security interest for securing repayment of any
financial asset not exceeding Rs. 1 Lakh
C. Any rights of unpaid seller u/s 47 of the Sale of Goods Act,1930 D. All of the above
88 A copy of every notification u/s 31A proposed to be issued shall be laid in draft before---------------,
while it is in session , for a total period of 30 days
A. State government B. High Court
C. ARC D. Each House Of Parliament
89
Does Civil Court have the jurisdiction to grant an injunction in respect of any matter which the Debts
recovery Tribunal or the Appellate Tribunal is empowered to determine
A. Yes B. No
90 The communication of the reasons to the borrower by the secured creditor for not having accepted his
representation or objection or the likely action of the secured creditor shall not entitle the borrower to
make an application to the-----------.
A. Court of District Judge B. Central Government
C. State Government D. ARC
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91 RGB bank which holds charge on all assets of the ABC Ltd. company. ABC Ltd. company failed to repay
the amount. Bank took over control of the company in compliance of the provisions of the SARFAESI,
2002. By appointing 5 persons as directors. Mr. B as managing director, is managing the company.
Whether Mr. B is entitled to compensation for loss of office?
A. YES B. NO
92 S ltd is a securitisation and reconstruction company as per provisions of SARFAESI, 2002. The certificate
of registration was cancelled. State the authority which can cancel
A. RBI B. Central Registry
C. High Court D. District Judge
93 In continuation to the above case, what are the rights of S Ltd against such cancellation
A. No rights B. Appeal to the Central Government
C. Appeal to the Appellate tribunal D. None of the above
94
Sofa ltd. is a securitisation company. In the due course, Sofa Ltd. failed to maintain accounts in
accordance with the requirements of any law or any direction or order issued by the RBI under the
provisions of this Act. Thus, this action of SOFA ltd. is contravention of SARFAESI 2002. Advice as per
the Act what could be done now.
A. Suspension of certificate of registration B. Cancellation of Certificate of registration
C. None of the above D. None of the above
95 Section 13(13) states that, no borrower shall after receipt of notice u/s. 13(2) transfer by way of sale,
lease or otherwise any of his secured asset referred to in the notice, without prior written consent of
the secured creditor
A. True B. False
96 Does SARFAESI, 2002 apply in the following situations?
a. A pledge of movables within the meaning of section 172 of the Indian Contract Act,1872
b. Creation of any security in any aircraft as defined in clause (1) of section 2 of the Aircraft
Act,1934
A. Apply B. Does not apply
97 EFG Ltd. issued listed bonds 5 years ago, which is due to be redeemed in the current year worth 50
crore Rs. The single largest bond holder NM ltd. wants to know options under SARFAESI Act 2002 in
case EFG Ltd. fails to repay the debt. Advice
A. Recourse to all options as available to
secured creditors
B. No Recourse to all options as available to
secured creditors
98 What is the threshold of assets for applicability of SARFAESI,2002
A. 100 CR B. 400 CR
C. 200 CR D. 500 CR
99 No secured creditor shall be entitled to exercise the right of enforcement of securities under Chapter
III unless the security interest create under in its favour by the borrower has been registered with the
Central Registry
A. True B. False
100 The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained
in any other law for time being in force or any instrument having effect by virtue of any such law.
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A. True B. False
109 An ARC registered with RBI to carry on the business of asset reconstruction are deemed to be
____________ which can invite any number of qualified institutional buyers to subscribe its
debentures, bonds etc.
101 An Asset management company proposes to change its registered office address. Is RBI approval
mandatory?
A. Yes B. no
102 XY Ltd has defaulted in payment of its loan which was acquired through joint financing from A Ltd and
B Ltd in the ratio of 35:65. XY Ltd has not responded to the written notice issued by both the
borrowers. A Ltd wishes to enforce its security interest to recover his debt. Can A Ltd exercise his right
to enforce security interest alone?
A. Yes B. no
C. Both a & b D. Both B & c
103 As per Change in or takeover of management of business (RBI) Guidelines, 2010, a Securitization
Company may effect change or takeover of management if the amount due from borrower exceeds :
A. 35 B. 45
C. 25 D. 55
104 The SARFAESI Act, applies to
A. A lien on goods, money or security given
under Indian Contract Act 1872 or Sale of
Goods Act 1930
B. Creation of any security in any aircraft as per the
Aircraft Act 1934
C. Any security interest for securing
repayment of any financial asset
exceeding Rs 1,00,000
D. Any case in which the amount due is less than
20% of the principal amount and interest
thereon
105 In a landmark case of BPV Classic Tea Factory Pvt Ltd v. Corporation Bank, the judgment given with
regard to enforcement of security interest was
A. SARFAESI Act prevails over Companies
Act 2013
B. Companies Act prevails over SARFAESI Act
C. Both are to be abided D. No such Judgment was passed
106 As per Security Interest (enforcement) Rules,2002, on sale of immovable property by the secured
creditor, the purchaser shall pay a deposit of _____ of the amount of sale price immediately and
balance within ______ days of such sale.
A. 15% , 15 days B. 35%, 20 days
C. 25%, 15 days D. 50%, , 30 days
107 As per the judgement passed in Mardia Chemicals v. UOI, is SARFAESI Act Unconstitutional on grounds
that it is heavily in favour of lenders.
A. Yes B. The act has been amended in view of the case
C. The act is regarded as unconstitutional D. No
108 The definition of Bank has been amended to include
A. Nationalized banks B. Multi-state Co-operative banks
C. Private banks D. None of the above
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A. Public Financial Institution B. Bank
C. Non-banking Financial Corporation D. Merchant banker
110 Every company functioning as securitization company or reconstruction company shall have net owned
funds of _____ or _____ % of financial assets, whichever is higher.
A. 100 Crores or 25% of financial assets B. 50Crores or 10 % of financial assets
C. 100 Crores or 15% of financial assets D. 2 Crores or 15% of financial assets
111 What is Principle of Subrogation
A. When ARC acquires financial assets of any
bank or financial institution it is deemed as
lender
B. When ARC enforces its interest on the assets
C. When ARC takes over the management of
the borrower, it is deemed owner of the
company.
D. None of the above
112 Which all measures an ARC can take for the purpose of asset reconstruction
A. Proper Management of Business of borrower B. Sale or lease of a part or whole of business of
the borrower
C. Waiver of dues payable by borrower D. All of the above
113 XY Ltd has raised a loan of Rs 10 lakhs and has defaulted in payment of Rs 5000 on the due date.
Written notice has been given to XY Ltd demanding the payment of his liability in full within 60 days. Is
the account of XY Ltd classified as NPA ?
A. Yes even a debt of Rs 1 outstanding is
classified as NPA
B. No debts are classified as NPA only if they
exceed 1,00,000
C. No Debts are classified as NPA only if they
exceed 10,000
D. None of the above
114 XY Ltd has defaulted in payment of its debt; ARC has taken action to realize its assets through auction
and has incurred expenses related to realization of assets. Can ARC recover the expenses incurred from
borrower on realization of such assets?
A. No ARC has to bear the cost and expenses B. ARC can recover 50% of the expenses and cost
incurred
C. ARC can recover full expense and cost incurred D. ARC and Borrower can mutually decide
115 The debts of AB Ltd are not fully satisfied even after enforcement of security interest of all secured
assets, the secured creditor can file an appeal to which of the following authorities ?
A. Debt Recovery Tribunal B. High court
C. Debt Recovery Appellate Tribunal D. Any of the above
116 What is the effect when the secured creditor has taken over the management of the borrower
A. No Director shall be nominated or appointed
by shareholders of borrower company
B. No resolution passed in the shareholders meeting
shall be given effect without the approval of
secured creditor.
C. No winding up of the borrower’s company shall lie in any court except with the consent of secured creditor
D. All of the above
117 What are the penal provisions if the ARC fails to comply with the directions issued by RBI?
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A. 5000 per day during which the default
continues
B. 10,000 per day during which the default
continues
C. 5,00,000 D. 1,00,000
118 An Injunction granted by the civil court to stop the secured creditor from selling or leasing the
secured assets is valid?
A. Yes B. No
119 Can a secured creditor take measures to claim his interest in the secured assets of the borrower if a
period of 12 years has been lapsed
A. No the period of limitation applies as per
the Limitation Act 196
B. Yes the limitation act 1963 does not apply to
claims under SARFAESI Act.
120 Which of the following does not require a public notice in newspaper
A. Sale of immovable Property by the
secured creditor
B. Sale of Movable property by the secured creditor
C. Demand Notice to the borrower D. Both (b) and (c).
Chapter 4
SECURITISATION & RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT
OF SECURITIES INTEREST ACT, 2002
© CA Darshan D. Khare
4.15
ANSWERS
1. B 2. A 3. C 4. C 5. B 6. A
7. B 8. A 9. D 10. C 11. A 12. B
13. B 14. C 15. B 16. A 17. D 18. D
19. D 20. A 21. A 22. D 23. A 24. C
25. D 26. C 27. D 28. C 29. A 30. C
31. A 32. B 33. D 34. D 35. D 36. A
37. B 38. A 39. C 40. B 41. A 42. A
43. D 44. B 45. B 46. D 47. B 48. A
49. B 50. A 51. C 52. B 53. A 54. C
55. B 56. D 57. A 58. D 59. B 60. C
61. A 62. C 63. C 64. C 65. A 66. A
67. D 68. A 69. C 70. A 71. C 72. A
73. C 74. D 75. C 76. A 77. A 78. A
79. D 80. A 81. A 82. B 83. A 84. C
85. A 86. C 87. D 88. D 89. B 90. A
91. B
(As per section 16, no compensation to directors,
manager or person in charge)
92. A 93. B 94. B 95. A 96. B
97. A 98. D 99. A 100. A 101. A 102. C
103. C 104. C 105. A 106. C 107. D 108. B
109. A 110. C 111. A 112. D 113. A 114. C
115. A 116. D 117. C 118. B 119. A 120. D
Chapter 5 PREVENTION OF MONEY LAUNDERING ACT, 2002
© CA Darshan D. Khare
5.1
Chapter 5 : PREVENTION OF MONEY LAUNDERING ACT, 2002
1 When did the Prevention of Money Laundering Act come into force?
a. 1 April 2009 b. 1 July 2005 c. 1 August 2005 d. 1 August 2009
2 Which of the following acts can be considered as acts of Money Laundering in the act?
a. Illegal arms sales b. Drug trafficking c. Insider trading d. All of the above
3 Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is
actually involved in any process or activity connected with the proceeds of crime and ________________
shall be guilty of offence of money-laundering.(Section 3 of PMLA)
a. Intentionally Participates b. Unknowingly participates c. Projecting it as untainted property
4 What is a `scheduled offence’?
a. Circulation of Fake
Indian Currency Notes
b. Offences relating to
Narcotic Drugs
c. Waging war against
the Nation
d. All of the Above
5 Mr. P was found guilty as per the provisions of Prevention of Money Laundering Act, 2002. Who can
investigate his case of Money Laundering?
a. Director/Officer u/s 48 b. Police Inspector c. Officer of Supreme Court d. None
6 Financial Institutions as per clause c of section 45 I of the Reserve Bank of India Act, 1934 include
a. A chit fund company b. Housing finance
Institutions
c. Non-Banking financial
company
d. All of the above
7 Mr. X was found guilty of money laundering as per provisions of Money Laundering Act, 2002. What are
the possible actions which can be taken against Mr. X?
a. 3 to 7 years Imprisonment
and Fine
b. 3 to 7 years
Imprisonment
c. Only Fine d. upto 3 year
Imprisonment
8 Mr. Y was found guilty under Narcotic drugs and Psychotropic Substances Act, 1985. What are the
possible actions which can be taken against Mr. Y for money laundering of the sum therefrom?
a. 3 to 10 years Imprisonment
and Rs. 1,00,000 Fine
b. 3 to 7 years
Imprisonment
c. 3 to 10 years
Imprisonment and Fine
d. upto 3 years
imprisonment
9 Every reporting entity u/s 12 (Banking Company, Financial institution, Intermediary or a person carrying
on a designated business or profession) is required to maintain records after the end of an relationship
with a client for :
a. 1 year b. 3 years c. 5 years d. 10 years
10 Section 12 of the Prevention of Money Laundering Act, 2002 lays down following obligations on banking
companies, financial institutions and intermediaries
a. Maintain a record
of all transactions
b. Verify and maintain the
records of the identity
of all its clients
c. Furnish information of
transactions referred to in
clause (a) to the Director
d. All of the
above
11 Every reporting entity u/s 12 (Banking Company, Financial institution, Intermediary or a person carrying
on a designated business or profession) is required to maintain records after the transaction with a client
for :
a. 1 year b. 3 years c. 5 years d. 10 years
Chapter 5 PREVENTION OF MONEY LAUNDERING ACT, 2002
© CA Darshan D. Khare
5.2
12 Director (Adjudicating Authority) has reason to believe that Mr T is in possession of proceeds of crime
and such proceeds of crime are likely to be transferred which may result in frustrating any proceedings
relating to confiscation of such proceeds of crime. So for how many days such property can be attached?
a. Not exceeding 90 days b. Not exceeding 180
days
c. Not exceeding 1
month
d. Not exceeding 60
days
13 The officer attached Property of Mr A as per Section 5(1) of Prevention of Money Laundering Act 2002.
Upto how many days from such attachment, the officer is required to file complaint before the
adjudicating authority?
a. 45 days b. 60 Days c. 90 Days d. 30 Days
14 Central Government appoints an Adjudicating Authority comprising of Mr X as chairperson, Mr B and Mr
D as members. Mr. B is experienced in the field of Accountancy. Is the appointment in lines of the
provision of Prevention of Money Laundering Act, 2002?
a. Yes b. No
15 Adjudication authority has reason to believe that Mr. B is in possession of proceeds of crime. What is the
next course of action to be taken by Adjudicating Authority?
a. Arrest Mr. B b. Serve a notice of not less
than 30 days, to indicate
source
c. Serve a notice of not
less than 45 days to
refund
d. Make him pay fine
RS.10000
16 Mr. Santosh is aggrieved by an order made by the Adjudicating Authority under the Prevention of Money
Laundering Act, 2002. He wants to file an Appeal. Which is the Appellate Authority against the order
passed by Adjudicating Authority?
a. Appellate Tribunal b. High Court c. Supreme Court d. None of the above
17 In addition to the above question, what is the time limit to file appeal after making of order by
Adjudicating Authority?
a. 15 days b. 45 days c. 30 days d. 60 days
18 Mr Dev wants to file appeal before Appellate Tribunal. But he could not file appeal within 45 days from
the date on which copy of order made by Adjudicating authority is made. Can Appellate Tribunal may
entertain an appeal after the expiry of the said period of forty-five days if sufficient cause for not filing it
within that period is shown. (Section 26)
a. Yes b. No
19 Appellate Tribunal passed an order against Mr. G. Mr. G is aggrieved by the same. He wants to file appeal
against order passed. To whom can he appeal against the order passed by Appellate Tribunal?
a. Adjudicating Authority b. High Court c. Supreme Court d. Parliament
20 In addition to the above question, what is the time limit to file an appeal against the order passed
Appellate tribunal?
a. 15 Days b. 30 Days c. 45 Days d. 60 Days
21 Mr Jack is a drug trafficker who deals in banned drugs. This offence is categorised under which part of
the Schedule?
a. Part A b. Part B c. Part C d. Part D
22 Cash Limited is Banking Company. One of the obligations of the Banking Companies is to maintain and
Chapter 5 PREVENTION OF MONEY LAUNDERING ACT, 2002
© CA Darshan D. Khare
5.3
submit records. Cash Limited did not maintain and submit the records. What are the penalties that can
be imposed on banking company, financial institution and intermediary for non-maintenance of records
or non-submission of aforesaid information?
a. Fine more
than 10000
Rs for each
failure
b. Imprisonment of 7
years and fine
exceeding 100000 Rs
for each failure
c. Fine not be less than ten
thousand rupees but may
extend to one lakh rupees for
each failure. (Section 13)
d. Fine not less than
20000 Rs and
Imprisonment 7
Years
23 What are special Courts under Prevention of Money Laundering Act, 2002?
a. Designated one or
more Courts of Session
b. Designated Municipal
Corporation
c. Designated
Committee
d. Designated High
Court
24 Which is the Appellate Authority against the order passed by Special Court?
a. No Appellate Authority b. High Court c. Other Sessions Court d. Supreme Court
25 Mr Y was found guilty under the provisions of the Prevention of Money Laundering Act; 2002.He was
imposed with fine under section 63 of the Act on 1 January 2018. Upto what date he should pay
aforesaid fine?
a. 1 April 2018 b. 30 December 2018 c. 1 June 2018 d. 30 June 2018
26 In addition to the above question, if Mr Y does not pay fine within prescribed time then what is the
mechanism to recover the fine imposed on any person under Section 13 or Section 63?
a. Recover
with interest
b. File Case with
the Police
c. Arrest
Mr Y
d. Same manner as prescribed in Schedule II of the
Income-tax Act, 1961 for the recovery of arrears.
27 EF Limited, a company, found guilty under the provisions of Prevention of money laundering Act, 2002.
Mr. Ved was one of the directors, who was responsible for the business of the company when the crime
was committed. Later he resigned. Shall he be deemed to be guilty of the contravention and be liable to
be proceeded against and punished accordingly? Advice.
a. Yes b. No
28 EF Limited, a company, found guilty under the provisions of Prevention of money laundering Act, 2002.
Mr. Ved was one of the directors who was responsible for the business of the company when the crime
was committed. Later he resigned. During the proceedings under the said Act he proved that the con-
travention took place without his knowledge and that he exercised all due diligence to prevent such
contravention. Shall he be deemed to be guilty of the contravention and be liable to be proceeded
against and punished accordingly? Advice.
a. Yes b. No
29 Mr.X convicted as per the Provisions of the Prevention of Money Laundering but under Contract Act he is
not guilty. Under such circumstances what will happen if there is conflict between the provisions of
PMLA, and other Acts / laws?
a. Decision is taken as
per the severity of
crime committed
b. The provisions of PMLA have over-riding effect,
notwithstanding anything inconsistent therewith
contained in any other law for the time being in force.
c. Not
Applicable
30 Proceedings under Prevention of Money Laundering Act, 2002 were initiated against Mr. Satya. During
the Proceedings he suffered cardiac arrest and died. What will happen to the proceedings initiated under
PMLA in the event of death of Mr. Satya?
a. Proceedings discarded
by authority
b. Legal Representatives are
not recognised in PMLA
c. Legal representatives continue Appeal
to the Appellate Tribunal / High Court
Chapter 5 PREVENTION OF MONEY LAUNDERING ACT, 2002
© CA Darshan D. Khare
5.4
31 Mr. Adi, an Accountant of Orchids Co. steals heavy cash from the business. To avoid detection of his
steal, instead of depositing large amount of money into his bank account, he deposits the money in small
amounts in his bank account on regular time interval. Can this transaction be considered under the
definition of Money Laundering?
a. Yes b. No c. Don’t Know d. May be
32 As per the provisions of the Prevention of Money Laundering Act, 2002, proceedings were initiated
against Mr. Yadav for a scheduled offence. His property was attached. Mr. Yadav was later acquitted on
conclusion of trial. What will happen to the attached properties, after conclusion of trial for the
scheduled offence?
a. His property will be released on
surety. Surety will be cancelled later,
if no Appeal is made.
b. His Property will remain confiscated
and an equivalent amount of money
will be paid instead in lieu thereof
c. Attachment
shall cease to
have effect
33 In the case of Mr. R after the conclusion of trial for the scheduled offence the attachment of property
becomes final. The Adjudicating Authority after giving an opportunity of being heard to the person
concerned, made an order confiscating such property. After an order of confiscation what will happen to
the attached properties after conclusion of trial for the scheduled offence?
a. The order of
attachment of
property will
become final
b. The Property will
be released and
equivalent amount
of cash will be
obtained
c. The attachment of
the property and
net income, if any,
shall cease to have
effect.
d. All the rights and title in
such property shall vest
absolutely in the Central
Government free from all
encumbrances. (Section 9)
34 Whether the persons claiming or entitled to claim any interest in the enjoyment of immovable property
can enjoy the property during the period of provisional attachment?
a. Yes b. No
35 An officer believed that Mr O was in possession of proceeds of crime and such proceeds of crime are
likely to be transferred. The Officer, by an order in writing, provisionally attaches such property for a
prescribed period. How long will this order of provisional attachment of property remain valid?
a. Period <= 150 days
from the date of the
order
b. Period <= 120 days
from the date of
the order
c. Period <= 180
days from the
date of the order
d. Period <= 90 days from
the date of the order
36 “Attachment” means, -------------------------------------------- or movement of property by an order issued
under Chapter III of the Act. [Section 2(d)]
a. Prohibition of transfer b. Conversion, c. Disposition d. All of the above
37 Mr. A was found involved routing illegal proceeds by sale of banned drugs through various bank accounts
and moving cash from Mumbai to Delhi. Is this transaction considered as Money Laundering
Transaction?
a. Yes b. No
Chapter 5 PREVENTION OF MONEY LAUNDERING ACT, 2002
© CA Darshan D. Khare
5.5
Answers
Q. No. Option No. / Reason
1. b
2. d
3. c
4. d
5. a Sec 48 & 49
6. d
7. a Sec 4
8. c Sec 4
9. c Sec 12
10. d
11. c Sec 12
12. b Sec 5
13. d Sec (5)
14. a Sec 6
15. b Sec 8
16. a Sec 26
17. b Sec 26
18. a Sec 26
19. b Sec 42
20. d
21. a
22. c
23. a Sec 43
24. b
25. d Sec 69
26. d Sec 69
27. a Sec70
28. b Sec 70
29. b Sec 71
30. c Sec 72
31. a
32. c Sec 8(5)
33. d Sec 8(3)
34. a Sec 5(4)
35. c Sec 5
36. d
37. a
Chapter 6 ARBITRATION AND CONCILIATION
© CA Darshan D. Khare
6.1
Chapter 6 : ARBITRATION AND CONCILIATION
1.
Which of the following are Alternate Methods of Dispute Resolution (ADR method):
a. Arbitration b. Conciliation c. Both a. and b. d. Neither a. nor b.
2. Which of the following are benefits derived from use of ADR methods:
a. Lower Costs b. Greater procedural flexibility c. High likelihood of settlement d. All of these
3. Which of the following is not a method of ADR:
a. Panchayat b. Lok Adalat c. Permanent Lok Adalat d. Judicial Settlement
4. ‘Arbitral Award’ means: a. Only final award
from Arbitration
b. Only Interim Award
from Arbitration
c. Both Final and Interim
awards
d. None of these
5. ‘Arbitral Tribunal’ refers to:
a. Sole Arbitrator b. Panel of Arbitrators c. Both a. & b. d. Neither a. nor b.
6. Arbitrator is selected by:
a. SG b. CG c. Ministry of Justice d. Parties themselves
7. Features of Arbitration include:
a. Consent of Parties b. Selection of Seat of
Arbitration
c. Confidentiality of
Arbitration proceedings
d. Appointment of
Arbitrator by CG
8. Arbitration proceedings are to be conducted at:
a. Sessions Courts b. High Courts c. Municipal Council d. Place chosen by parties
9. Arbitrator is assigned to the Arbitration Proceedings by:
a. Parties to the
Arbitration Proceeding
b. Bench of Judges of
Supreme Court
c. Council of Ministry of
Justice
d. Expert
Committee of CG
10. Arbitration Proceedings strictly adhere to:
a. Code of Civil
Procedure
b. Code of Criminal
Procedure
c. Parties choose their
procedure to suit them
d. Code of the International
Court of Justice
11. Proceedings are conducted:
a. Open to public b. Open to parties and their
lawyers only
c. Both a. and b. d. Only lawyers of parties.
12. Arbitration decisions i.e. award is easy to enforce in Foreign Countries compared to Court rulings
a. Yes, as it is governed by
International treaties
b. No c. N.A as Arbitration is only
for Domestic disputes
d. Depends on the
of award
13. Powers under the Arbitration and Conciliation Act 1996 are granted to:
a. Judicial Authority b. Court c. SC/HC d. All of these
14. For International Commercial Arbitration, the term ‘Court’ means
a. Lok Adalat b. Sessions Court c. High Court d. None of these
Chapter 6 Arbitration and Conciliation
© CA Darshan D. Khare
6.2
15. For Arbitration other than International Commercial Arbitration, the term ‘Court’ means
a. District Court b. High Court c. Both a. and b. d. Neither a. nor b.
16. On a request for appointment of Arbitrator, the High Court shall appoint Arbitrator for:
a. International Commercial
Arbitration
b. Domestic Arbitration c. Both a. and
b.
d. Neither a. nor
b.
17. On a request for appointment of Arbitrator, the Supreme Court shall appoint Arbitrator for:
a. International Commercial
Arbitration
b. Domestic
Arbitration
c. Both a. and b. d. Neither a. nor b.
18. A person or Institution can be designated by SC/HC to appoint arbitrators:
a. True, for both SC/HC b. False, for both SC/HC c. True, only for SC d. True, only for HC
19. Arbitration agreement shall be in form of:
a. Arbitration Clause in
a contract
b. Separate document
itself
c. Both a. and b. d. As per Govt
defined format only
20. Arbitration agreement can be in:
a. Written form only b. Oral form only c. Both a. and b. d. Even tacit form is permitted
21. Arbitration Agreement shall be in writing if:
a. it’s a document signed by both parties
b. it is contained in letters
and other non-electronic
communications
c. it is contained in letters
and other electronic
communications
d. All of
these
22. Document 1 consists of an Arbitration Contract. Document 2 merely refers to using the terms in
Document 1. Does reference qualify as an Arbitration Contract?
a. Yes b. No
23. ‘Arbitration Clause’ and ‘Submission Agreement’ differentiate the Arbitration Agreement on the basis
of:
a. The time when
the dispute arises
b. The time taken for
the dispute to be settled
c. The mode
(physical/electronic) of the
agreement
d. The number of
pages of the
agreement
24. ‘Arbitration Clause’ Arbitration Agreement makes the following disputes available to Arbitration:
a. Disputes arising after
making the Agreement
b. Disputes arisen before
making the Agreement
c. Disputes arising in
International Commercial
Arbitration
d. Disputes arising
for values less than
10% of turnover
25. ‘Submission Clause’ Arbitration Agreement makes the following disputes available to Arbitration: a. Disputes arising after
making the Agreement
b. Disputes arisen before
making the Agreement
c. Disputes arising in
International Commercial
Arbitration
d. Disputes arising
for values less than
10% of turnover
26. What shall happen if one of the 2 parties in an Arbitration unilaterally seeks to proceed to court to
litigate the matter:
a. The matter shall be
admitted and the
b. The matter shall be
referred back to
c. The matter shall be
admitted and fine shall be
d. Both proceedings
shall proceed
Chapter 6 ARBITRATION AND CONCILIATION
© CA Darshan D. Khare
6.3
arbitration shall
cease
arbitration imposed for breach of
contract
simultaneously, Court
decision prevails
27. The contract which contained the Arbitration Agreement was invalid. Will the Arbitration Agreement be
invalidated by this mere fact as well:
a. Yes, as it is a part
of the agreement
to which consent is
given
b. No, as it is not part of the
agreement , as Arbitration
agreement shall be made
and agreed to separately
c. No, as there is ‘Doctrine of Separability’ which allows both Contracts to perform
independently
d. None of the
above
28. The question arose before Arbitrator as to the validity of a contract which contained the Arbitration
Agreement. The contract was principal to the Arbitration Agreement. The ruling on the validity of
contract indirectly was a ruling on the Arbitrator’s own jurisdiction: Is this valid?
a. Yes, as per
the Act this is
valid
b. No, as generally a judge
cannot pass judgement on the
validity of his own appointment
c. No, as the Arbitrator is
required to arbitrate only
valid contracts under law
d. Yes, but only
after obtaining
permission of CG
29. Can one of the parties to the Arbitration Agreement themselves be the Arbitrator:
a. Yes, in case of
Government
Company, it can be a
Arbitrator in own
case
b. No, since the aspect of
neutrality is missing, such
Arbitration Agreement is
not covered in
Arbitration
c. Yes, provided that
Arbitrator is an officer of the
Government holding
specified Grade
d. Yes, provided that
if the ruling is in it’s own favour, the
other party forgoes
right to appeal
30. A Ltd and B Ltd agreed to Arbitration by a retired Judge in their joint venture. In pursuit of their Joint
venture, they dealt in certain Prohibited drugs, and divided the gains thereof. Later A disputed the
division of gains. Can this contract be arbitrated?
a. Yes, as conditions for
Arbitration are fulfilled
and that is only criteria
b. No, as the subject
under Arbitration is
strictly to be exercised
upon in Court
c. Yes, as the Judge is
competent to provide
judgement in matters of
Criminal nature
d. No, as the
Arbitrator is a retired
Judge and as such not
qualified
31. Principal Agreement was discharged after the completion of the duties thereunder. Will the Arbitration
Agreement made thereunder continue?
a. Yes, as Doctrine of Separability
applies making the Principal Contract
and Arbitration Agreement
independent
b. No, as the agreement is
completed and as such the
arbitration agreement also
terminated with the contract
c. Yes, as Arbitration
Agreement is always without
a limit on its time/tenure and
valid forever
32. Principal Agreement was terminated due to breach of Contract. Will the Arbitration Agreement made
thereunder continue?
a. Yes, as Doctrine of Separability
applies making the Principal Contract
and Arbitration Agreement
independent
b. No, as the agreement is
completed and as such the
arbitration agreement also
terminated with the contract
c. Yes, as Arbitration
Agreement is always without
a limit on its time/tenure and
valid forever.
33. In case of Death of the parties, the Arbitration Agreement shall:
a. be discharged b. be enforceable by or
against the legal
representative
c. be enforceable by the
legal representative but
not against him
d. be enforceable against
the legal representative
but not by him
34. Are even number of Arbitrators (i.e. 2,4,6…) on a Arbitral Tribunal permitted:
Chapter 6 Arbitration and Conciliation
© CA Darshan D. Khare
6.4
a. Yes, as per decision
upheld in a case
b. No, the Act prohibits
even number of
Arbitrators
c. Both a. and b. The Act clearly provides that
there can be any number of
Arbitrators.
35. What is the default appointment procedure u/s 11 in case no procedure is decided by the parties and
the maximum arbitrator shall be 1:
a. Parties appoint
jointly one arbitrator
b. Both appoint one
each, and the appointees
appoint a third
c. Appointment to be made
by an unrelated person or
institution
d. All of the above
36. What is the default appointment procedure u/s 11 in case no procedure is decided by the parties and
the maximum arbitrator shall be 3:
a. Parties appoint
jointly one arbitrator
b. Both appoint one
each, and the appointees
appoint a third
c. Appointment to be made
by an unrelated person or
institution
d. All of the above
37. Mr. Brainiac was a minor but highly rated by both the parties to arbitration, and hence appointed
arbitrator. What is the age limit to be appointed as an Arbitrator?
a. A minor cannot be arbitrator
as he is unable to contract
b. 45 years to
70 years
c. There is no age limit, or
inability imposed on
minors
d. Upper limit only of
70 years, no lower
limit
38. What is the default appointment procedure u/s 11 in case appointing authority to which duty to make
arbitrator appointment was given, failed to execute:
a. Parties
appoint jointly
one arbitrator
b. Both appoint
one each, and the
appointees
appoint a third
c. Appointment to be made by an
unrelated person or institution,
different from the first
person/institution that failed
d. Approach the SC/HC for
appointment based on type
of arbitration (i.e. Domestic/
International)
39. What are the instances in which an Arbitrator may be terminated
a. Voluntary decision
to step down
b. Unanimous decision
of parties to remove
c. Operation of Law (inability or
process ends)/ Termination by
Court in case of bias
d. All of
these
40. Course of action on termination of Arbitrator:
a. Appoint new arbitrator
under original scheme of
appointment
b. Parties to approach SC/ HC
based on the type of arbitration
(domestic/international)
c. First a. then b. d. First b. then a.
41. For termination of Arbitrator, whom should the first challenge be raised against:
a. Arbitrator himself b. District Court c. High Court d. Supreme Court
42. For termination of Arbitrator in case of Domestic Arbitration, whom should the challenge be raised
against (after the Arbitrator):
a. Panchayat/ Municipal Council b. District Court c. High Court d. Supreme Court
43. For termination of Arbitrator in case of International Commercial Arbitration, whom should the
challenge be raised against (after the Arbitrator):
a. Panchayat/Municipal Council b. District Court c. High Court d. Supreme Court
44. Arbitral Award is sought to be challenged by A. Ltd who was a party to the Arbitration along with B Ltd.
Chapter 6 ARBITRATION AND CONCILIATION
© CA Darshan D. Khare
6.5
In case of a Domestic Arbitration who can the challenge be made to?
a. Panchayat/Municipal
Council
b. District Court/High
Court
c. Only High Court d. Supreme Court
45. Arbitral Award is sought to be challenged by A. Ltd who was a party to the Arbitration alongwith B Ltd.
In case of an International Commercial Arbitration who can the challenge be made to?
a. Panchayat/Municipal Council b. District Court/High Court c. Only High Court d. Supreme Court
46. What is the Maximum time within which a challenge against the Arbitral Award can be made:
a. 1 month from the
date when Award is
received
b. 3 months from
the date when
Award is received
c. 1 month from the date
when Award is received .
Maximum extension of
further 30 days by Court
d. 3 months from the date
when Award is received .
Maximum extension of
further 30 days by Court
47. At what time is an Additional Award made:
a. After Settlement Award
but before expiry of 30
days thereof
b. After Interim
Award but before
Final Award
c. After Final Award but
before expiry 30 days
thereof
d. After Interim Award
but before expiry of 30
days thereof
48. What are the types of Interim Award:
a. Interim Award which remains
in force till Final Award is made
b. Interim Award which is Final as
far as the matters it deals with
c. Both a.
and b.
d. Neither a.
nor b.
49. What is a Settlement Award?
a. Matter adjudicated
by the Arbitrator, but
settled at lesser value
by parties than what is
decided by arbitrator
b. Parties choose to settle
the matters and not involve
the Arbitrator to adjudicate
the same. Once settled, if
the Arbitrator agrees, it is
made into an award
c. Claims not settled
previously in Final Award
are put forth to the Arbitral
tribunal within a time frame
in order to cover such left
out issues
d. None of
these
50. What is an Additional Award?
a. Matter adjudicated
by the Arbitrator, but
settled at lesser value
by parties than what is
decided by arbitrator
b. Parties choose to settle the
matters and not involve the
Arbitrator to adjudicate the
same. Once settled, if the
Arbitrator agrees, it is made into
an award
c. Claims not settled previously
in Final Award are put forth to
the Arbitral tribunal within a
time frame in order to cover
such left out issues
d. None
of these
Chapter 6 Arbitration and Conciliation
© CA Darshan D. Khare
6.6
Answers
Q. No. Ans. Q. No. Ans. Q. No. Ans. Q. No. Ans. Q. No. Ans.
1 c 11 b 21 d 31 b 41 a
2 d 12 a 22 a 32 a 42 b
3 a 13 d 23 a 33 b 43 c
4 c 14 c 24 a 34 c 44 b
5 c 15 c 25 b 35 a 45 c
6 d 16 b 26 b 36 b 46 d
7 d 17 a 27 c 37 a 47 c
8 d 18 a 28 a 38 d 48 c
9 a 19 c 29 b 39 d 49 b
10 c 20 a 30 b 40 c 50 c