JAIIB/Diploma in Banking & Finance LEGAL & REGULATORY ASPECTS OF BANKING
LEGAL ASPECTS OF BANKING OPERATIONS JAIIB MODULE C & D.
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Transcript of LEGAL ASPECTS OF BANKING OPERATIONS JAIIB MODULE C & D.
![Page 1: LEGAL ASPECTS OF BANKING OPERATIONS JAIIB MODULE C & D.](https://reader030.fdocuments.in/reader030/viewer/2022032801/56649de35503460f94ad9ff2/html5/thumbnails/1.jpg)
LEGAL ASPECTS OF BANKING OPERATIONS
JAIIB
MODULE C & D
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• 01.Any person aggrieved by the order passed by Debt Recovery Tribunal can file an appeal to the
• A. High Court B. Supreme Court
• C. Ombudsman D. Appellate Tribunal
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• 02.An act to regulate securitisation and reconstruction of financial assets and enforcement of security interest and for matters connected therewith or incidental thereto- Identify.
• A. Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest, 2002(SARFAESI ACT)
• B. Securitisation and Reconstructing of Financial Assets and Enforcement of Security Interest, 2002(SARFEASI Act)
• C. Securitising and Reconstruction of Financial Assets and Enforcement of Security Interest,2000 (SARFAESI ACT)
• D. Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest, 2002 (SARFEASI ACT)
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• 03. Based on the observation of Supreme Court in the Mardia Chemicals vs Union of India, the deposit for appeal under DRT decision has since been changed. Identify who has changed and how much it is now?
• A. Changed to 75% by the Supreme court• B. Reduced to 25% by the Central Govt• C. Increased to 50% by the Company Law Board• D. None of these
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• 04.As per SARFAESI Act 2002,the term Board means
• A. Reserve Bank of India
• B. Debt Recovery Tribunal
• C. Securitisation and Reconstruction Company
• D. None of these
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• 05.Which Statement is not correct (SARFAESI ACT 2002)
• A. The Act is not applicable to RRBs• B. The Act is not applicable to the State of
Jammu& Kashmir• C. The Act has retrospective application• D. A reference is made about
Hypothecation in this act only
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• 06.The transactions of asset securitisation, reconstruction as well as transactions of security interests will have to be registered with
• A. Registrar of Companies • B. Central Registry• C. SEBI & RBI• D. All the above
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• 07.When bank or financial institution lends money against security they are the
• A. Obligor B. Originator
• C. Lender D. Un Secured Creditor
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• 08.Obligor is
• A. Borrower/ Debtor
• B. Sponsor Bank
• C. Creditor Bank
• D. None of the above
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• 09.Which one cannot be a Qualified Institutional Buyer.
• A. Commercial Bank
• B. An Insurance company
• C. A partnership firm with vast exposure in finance field D. A Foreign Institutional Investor
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• 10.Which statement is correct.• A. An asset reconstruction company need not be
registered under Companies Act• B. A foreign institutional investor need not
register with RBI but need to register with SEBI.• C. A Securitisation company need not register
with RBI• D. For classification of any account as NPA, the
respective Banks can follow their own norms
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• 11.The Securitisation company or reconstruction company can acquire financial asset of any bank or financial institution by issuing
• A. Bond • B. Debenture • C. Any other Security • D. Any one of the above
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• 12. Securitisation companies can set up separate trusts scheme wise and act a trustee for such schemes. The beneficiaries of such trusts are
• A. Banks B. Debtors
• C. Trustees D. None of them
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• 13. Identify which evidences the purchaser’s undivided right, title and interest in the security.
• A. Ownership right B. Possession right
• C. Security Receipt D. Transfer Right
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• 14.The Securitisation company or the reconstruction company can acquire financial asset of any bank or financial institution.
• A. True B. False
• C. Incorrect D. Not True
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• 15. The person holding not less than 10% of the paid up equity capital of securitisation company or reconstruction company is known as
• A. Originator B. Obligor
• C. Investor D. None of these
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• 16.Debenture – which one is incorrect• A. A debenture for payment of consideration to be
paid to the bank for acquisition of financial asset from it.
• B. The rate of interest on debenture cannot be less than 1.5% above the Bank Rate as on the date of issue of Debentures
• C. Redemption period not beyond 6 years• D. None of the above
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• 17.Security Receipts (identify the incorrect one)
• A. They are in favour of the investors• B. They are issued to the Public• C. Qualified Institutional buyers can buy.• D. The Reconstruction company can raise
funds by issuing these receipts
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• 18. A securitisation company or reconstruction company can raise funds by way of deposits.
• A. Not in correct • B. Not applicable to Securitisation company but to
Reconstruction company • C. Not correct • D. Not applicable to Reconstruction company but to
Securitisation company
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• 19.Identify the incorrect one (Securitisation)• A. Non- Performing Asset is linked to overdue
period which is 180 days now.• B. If the asset is acquired for reconstruction limit
is 5 year for such reconstruction• C. Maintaining of Capital Adequacy of 15 % of
total assets acquired or capital of Rs.100 crore, whichever is less
• D. Detailed disclosure to be made by the Securitisation or reconstruction company
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• 20.The date agreed upon by the secured creditor representing not less than three-fourth in value of the amount outstanding on such date
• A. Agreed Date B. Record Date
• C. Due Date D. Agreement Date
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• 21. Which one is not coming under Securitisation
• A. Assignment of Book Debts
• B. Pledge of Goods
• C. Mortgage of Flat
• D. Hypothecation of Goods
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• 22.Enforcement of Security interest(Sec 13(2) Notice)
• A. Borrower is required to clear the liabilities within 60 days from the date of the notice
• B. The Act contemplates giving only two details like details of amount payable and securities
• C. The Act does contemplate a reply from the borrower to the notice
• D. An internal mechanism to be particularly evolved to consider the reply of borrower.
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• 23.The authorised official is required to publish the possession notice in
• A. atleast one leading newspaper
• B. two leading news papers
• C. One of which should be in vernacular language
• D. Both b & c
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• 24. If the price for secured asset is coming less that the reserve price, the authroised officer
• A. Can sell the asset at a lower price
• B. with the consent of the secured creditor
• C. Consent of the borrower is also a must
• D. All of these
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• 25.An authorised officer has finalised the sale of property for Rs.7 lacs. Then the proposed purchaser to remit
• A. Entire money at once
• B. Within a week
• C. 25% of the offer price
• D. no amount at once.
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• 26. In case of sale of immovable property, the borrower to be intimated by way of notice about the intended sale before
• A. 15 days B. 30 days
• C. 45 days D. 60 days
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• 27.The authorised officer can (Securitisation Act)
• A. Accept the offer
• B. Confirm the sale
• C. Issue Sale Certificate
• D. Carry out all the above
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• 28. The Authorized officer (Securitisation act) is authorized to issue sale certificate.
• A. Such certificate is conveyance of immovable property.
• B. It requires stamping • C. Such stamping to be as per the relevant
State laws• D. All the above are appropriate
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• 29.Provisions of SARFAESI Act not applicable in respect of
• A. Hire purchase or lease in which no security interest has been created
• B. A pledge of movable asset• C. Any security interest created in
agricultural land• D. All the above
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• 30. A bank had advanced Rs.22 lacs. The present liability is Rs.29 lacs. They have decided to invoke the provisions of SARFAESI Act. However, they expect to realise around Rs.16 lacs. For the balance they
• A. Can refer the matter to Banking Ombudsman• B. Cannot move any court of law• C. Can approach DRT• D. Can move civil court
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• 31. A bank could realise part of the liability by using Securitisation procedure. The balance outstanding is Rs.3 lacs without any tangible security.
• A. Bank will have to forego• B. Bank can approach DRT• C. Bank may have to approach civil court• D. Bank will have to write off
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• 32. After recovery through Securitisation process for recovery of balance outstanding, the bank can approach competent legal authority, provided
• A. Debt is time barred • B. Limitation period is not expired• C. Limitation period has not been extended• D. Borrower gives his consent in writing
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• 33.The Banking Ombudsman shall be provided with a Secretariat drawn from banks or RBI . The cost of the Secretariat will be borne by
• A. Banks• B. RBI & respective State Governments• C. Ombudsman• D. Government
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.34. Review Authority for Banking Ombudsman is
A. Banking Ombudsman himself
B. Awarding Official
C. RBI Executive Director
D. None
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• 35.Banking Ombudsman identify odd one• A. Non observance of RBI directives on
interest rates• B. Failure to pay LC amount• C. Adherence of prescribed working hours
by bank branches• D. Refuse to issue Demand Drafts to
customers
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• 36. Banking Ombudsman as an Arbitrator to follow the scheme as well as the provisions of
• A. Banking Regulation Act
• B. Arbitration Act
• C. Contract Act
• D. None of these
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• 37.Which one will not come under the purview of DRT provision ( Outstanding liability Rs.16 lacs)
• A. Overdrawal of money from a bank account without any overdraft facility
• B. Liability inclusive of interest but not fully secured
• C. Liability inclusive of interest, secured• D. None of these
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• 38. As per provisions of DRT act, a Recovery Officer is one who is
• A. Appointed by the Chief Justice of India
• B. Appointed in consultation with RBI
• C. Appointed by the Central Government
• D. Transferred from another Court
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• 39.DRT (identify the odd one)• A. The Limitation Act provisions applicable for
DRT cases• B. An application for execution of the decree of
foreign court can be entertained by Debt Recovery Tribunal
• C. Other Bank cannot join the application• D. Tribunal will not deal with cases less than
Rs.10 lacs
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• 40.Which statement is incorrect (DRT)• A. The Presiding Officer of the Tribunal to issue a
certificate under his signature to the Recovery Officer for recovery of the amount of debt specified in the certificate
• B. The Tribunal is required to send copy of every order passed by it to the applicant and the defendant
• C. The Tribunal can grant liberal adjournments • D. If evidence is taken by way of an affidavit, it is not
mandatory for the Tribunal to require production of witness for cross-examination.
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• 41. Find out the correct mode of recovery of debts (DRT)
• A. Sale of immovable property
• B. Attachment and sale of movable assets
• C. Arrest of the defendant and his retention in prison
• D. Any of the above
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• 42.Any person aggrieved by the order passed by DRT may prefer an appeal to an Appellate tribunal within
• A. 15 days of such order • B. 30 days from the date on which copy of the
order is received• C. 45 days from the date on which copy of the
order is received• D. 60 days of such order
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• 43. Any person aggrieved by the order of Recovery Officer may appeal to the Tribunal within
• A. 15 days of such order• B. 30 days from the date on which copy of the
order is received• C. 45 days of such order• D. 60 days from the date on which copy of the
order is received.
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• 44. The recover certificate issued (DRT) can be withdrawn by
• A. Recovery Officer
• B. Competent Judge
• C. Presiding Officer
• D. Authorised Officer
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• 45.Who has the powers to frame rules under the Act (DRT) to carry out the provisions of the Act.
• A. Parliament
• B. Central Government
• C. RBI
• D. All the above
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• 46.The Banker’s Book Evidence Act (identify the correct one)
• A. The Act extends to the whole of India including the State of Jammu & Kashmir
• B. Records in Electronic Data not included• C. Judge means Judge of the Supreme Court• D. The Act extends to the Whole of India
except the State of Jammu & Kashmir
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• 47.A certified copy of any entry in a banker’s book shall in all legal proceedings be received as conclusive proof of the existence of such entry.
• A. The above is not incorrect • B. The above is incorrect• C. It is not to be treated as conclusive proof but as
prima facie evidence• D. It is to be treated as final proof and no need to
insist on original records for verification
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• 48. A dispute where the person against whom complaint has been made, denies or dispute the allegations contained in the complaint refers to
• A. Consumer Dissatisfaction• B. Consumer Dispute• C. Deficiency in Customer Service• D. Customer Complaint
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• 49.As per the Consumer Protection Act, the term goods do not include
• A. Stocks and Shares
• B. Growing crops
• C. Grass attached to the land
• D. All the above
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• 50.Goods and services which are claimed to be genuine but they are actually not so.
A. Bogus goods and services
B. Not Genuine goods and services
C. Spurious goods and services
D. Inferior goods and services
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• 51.Which one is not correct
• A. The District Consumer Protection Council to meet atleast two times in a year.
• B. The Central Consumer Protection Council to meet atleast once in a year.
• C. The State Consumer Protection Council to meet atleast once in a year.
• D. The Central Consumer Protection Council is also called as Central Council
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• 52. Against the order of District Forum appeal to State Commission has to be filed within
• A. 30 days B. 45 days
• C. 60 days D. 90 days
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• 53. State Commission has jurisdiction to• A. entertain complaints where the value of the
goods or services and compensation, if any, claimed exceeds Rs 50 lacs but does not exceed Rs1 crore
• B. consider appeals against the orders of any District Forum within the State
• C. call for records and pass appropriate orders• D. Implement all the above
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• 54. All notices required to be served on the opposite party are deemed to be sufficiently served
• A. If handed over to him in person• B. If addressed to the place where business or
profession is carried by him• C. If addressed to the last known address.• D. If addressed to the address available on record
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• 55. An agreement entered into by a minor is
• A. void
• B. invalid
• C. not valid since inception
• D. All of these
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• 56. Identify the correct group
• A .Indemnity - Contract Act
• B. Pledge - Transfer of Property Act
• C. Mortgage - Contract Act
• D. Assignment - Contract Act
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57. Bank x has given a loan to R on the personal guarantee of U. R defaults and when Bank x requested U to make the payment, he refuses and ask the bank to approach only R who has actually taken the money.
A. Bank x has to exhaust all their remedies against R before
approaching U.
B. Bank x can straight away approach U
C. Bank x has to approach R and then U
D. Bank x can approach both simultaneously
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• 58.It is the delivery of goods by one person to another for some purpose. When the purpose is accomplished, the goods are to be returned or otherwise disposed of according to the direction of the person delivering them.
• A. Hypothecation B. Bailment• C. Assignment D. None of these
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• 59. The bailment of goods as security for payment of a debt or performance of a promise is known as
• A. Hypothecation B. Special Bailment
• C. Transfer D. Pledge
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• 60.Which one is correct ( Contract of Agency)• A. No consideration is necessary to create agency.• B. The authority of an agency may not be
expressed or implied• C. Agency will not be terminated when the
Principal is declared as an insolvent• D. The principal is not liable to indemnify the
agent against the consequences of acts done by him in good faith
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• 61. Sale of Goods Act will cover
• A. Future goods B. Actionable Claims
• C. Land D. None of these
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• 62. Which one does not pertain to Sale.• A. The Seller can only sue for damages• B. The risk in goods is with the buyer• C. It is a contract in which the parties have already
performed their part• D. The ownership of goods have already passed
irrespective of whether the goods are delivered or not.
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• 63. Which one is not part of an Agreement to Sell• A. The parties yet to perform their mutual
promises• B. The seller can file a suit and demand the price• C. The risk of goods is still with the seller and
passes to the buyer only after the agreement to sell becomes a sale.
• D. The ownership is yet to pass from the seller to the buyer
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• 64.Caveat emptor a warning and caution to
• A. Buyer B. Seller
• C. Both a & b D. None of these
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• 65.There is an implied condition on the part of the seller that
• A. He has a right to sell the goods (in the case of an agreement to sell)
• B. He will have a right to sell the goods at the time when the ownership is to pass on to the buyer (in the case of a sale)
• C. He has a right to sell the goods ( in the case of a sale)
• D. None of these
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• 66. Implied Warranty • A. There is an implied warranty that the buyer shall have
and enjoy quiet possession of the goods• B. There is an implied warranty that the goods shall be free
from any charge or encumbrance in favor of any third party not disclosed or known to the buyer before or at the time when the contract is made.
• C. Generally there is an implied warranty as to the quality or fitness of goods for any particular purpose.
• D. For sale by description there is an implied condition that the goods shall correspond with the description.
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• 67.Unpaid Seller (which statement is not correct)
• A. A right of resale
• B. Right of stoppage in transit
• C. Lien on the unpaid goods
• D. Right not to withhold delivery of goods
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• 68.Where no provision is made by contract between the partners for the duration of their partnership or for the determination (i.e., the termination or end) of the partnership, then such a partnership is known as
• A. Particular Partnership • B. Specific Partnership• C. Special Partnership• D. None of these
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• 69.The implied authority of a partner does not empower him to
• A. Submit a dispute relating to the business of the firm to arbitration.
• B. Admit (accept) any liability in a suit against the firm
• C. Withdraw a suit filed on behalf of the firm• D. All of these
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• 70. R was admitted into a partnership to receive the benefits on 12.03.06 when he was a minor. On 01.04.07, R has become the major and decided to become a partner. Then R
• A. will be personally liable to all the actions of the firm wef 01.04.07
• B. will not be personally liable to all the actions of the firm wef 01.04.07
• C. becomes personally liable to third parties for all acts of the firm done since he was admitted to the benefits of the firm i.e., wef 12.03.06
• D. will not be liable for past action (as stated in C) since at that time he was only a minor.
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• 71.M/s.KRL & co, a partnership firm has opened a current account with a bank. Among other documents they have also submitted their partnership deed. The said deed has specifically indicated that the partnership need not come to an end on account of retirement, resignation or death of any one of the partners. Partner R resigned. The Banker
• A. Need not allow further operations in the a/c• B. Can allow further operations• C. Provisions of Law will prevail• D. Contents of Partnership deed will be valid and effective
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• 72.A Pvt Ltd Company has borrowed money from the bank and executed necessary documents. However the Common Seal was not affixed. The company relied on the contents of their Articles of Association.
• A. The documents are not valid• B. The documents are valid• C. If the articles does not specify affixing of Common
Seal on loan documents then it is not compulsory• D. Affixing Common Seal on loan documents is part of
company documentation.
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• 73. This states that every outsider is assumed to have read the Memorandum of Association and Articles of Association.
• A. Doctrine of Indoor Management
• B. Doctrine of Constructive Notice
• C. Doctrine of Ultra vires
• D. Doctrine of Holding out
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• 74. Which one is not the Statutory Right (Companies)
• A. To participate in the distribution of assets in case of liquidation of the company
• B. Receive copy of annual accounts of the company
• C. To apply to the Company Law Board to call Annual General Meeting if the board of directors fail to call such a meeting.
• D. Transfer shares
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• 75.A transaction by which there may be a change (either an increase or decrease) in the assets or liabilities outside India of persons resident in India or assets or liabilities in India of persons resident outside India. (under FEMA)
• A. Capital Account Transaction• B. Domestic Account Transaction• C. Foreign Account Transaction• D. Current Account Transaction
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• 76.The mortgagor does not deliver possession of the mortgaged property to the mortgage, but binds himself personally to pay the mortgage money. In the event of his failing to pay, he agrees, that the mortgagee shall have a right to get the mortgaged property sold and recover his dues.
• A. English Mortgage B. Usufructuary Mortgage• C. Conditional Sale D. None of these
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• 77.For which type of Security, assignment is applicable
• A. Collateral security of book debts while main security is stock (under Cash Credit )
• B. Supply Bills facility
• C. Pledge of Life Policy
• D. All the above
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• 78. Notified Area is applicable to
• A . Pledge
• B . Immovable property taken as Main security
• C. Usufructuary Mortgage
• D. None of these
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• 79.Which one is not appropriate (Mortgage)• A. Private Sale possible under Conditional Sale
type Mortgage• B. Personal liability attached to Simple Mortgage• C. Equitable Mortgage does not attract stamp duty• D. Rent receivable will liquidate the outstanding
under Usufructuary Mortgage.
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• 80.It is a document by a company solicits funds from the public for its capital either by way of shares , debentures or deposits.
• A. Share Application
• B. Prospectus
• C. Document in lieu of Prospectus
• D. None of these
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• 81.As per the Companies Act,1956 which one does not require registration?
• A. Any share in a ship
• B. Assignment of Book Debts
• C. Pledge of Fixed Deposit of the Company
• D. Hypothecation of Work in progress inventory