LL.B. (Three Years) Sem 4 Bankruptcy Laws Oct 2024 75/25 Question Paper - Mumbai University | munotes

Questions asked in this paper

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Q.1 Q.1: Answer any six in one-two sentences (12 Marks - 2 marks each)

1. (a) When will the provisions of insolvency and liquidation of corporate persons be applicable on a corporate person?
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2. (b) What shall be included in Financial Information as per the Code?
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3. (c) What are the situations in which the provisions of the Code will apply to the entities governed by the Code?
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4. (d) What is repayment plan under the Code?
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5. (e) Within what time period Corporate Insolvency Resolution process shall be completed?
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6. (f) Define the term Financial Creditor.
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7. (g) Who prepares a list of creditors of the bankrupt under Section 132 of the Insolvency and Bankruptcy Code, 2016?
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8. (h) What is the order for distribution of proceeds from liquidation in IBC?
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Q.2 Q.2: Write Short Notes on any two (12 Marks - 6 marks each)

1. (a) Adjudicating Authorities under IBC Code.
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2. (b) Fast track CIRP.
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3. (c) Insolvency and Bankruptcy Fund.
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4. (d) Bankruptcy order in respect of individual and partnership firms.
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Q.3 Q.3: Answer any two of the following with reasons (12 Marks - 6 marks each)

1. (a) MM is a gym located at leased premises in Lajpat Nagar, New Delhi. Because of competition and other issues, MM is facing financial difficulties and its and it is not meeting its liabilities. All the efforts to revive the business, cut the costs or even sell the business were unsuccessful. Payment to equipment suppliers and maintenance agencies are due for supplies provided in the previous 3 months amounting to around Rs. 2 lakh. The rent for its premises remains unpaid for 3 months amounting to Rs. ninety thousand towards landlord Mr. D (the landlord had received advance rent for three months, lease deed provided for one-month rent as security and one-month rent as advance). MM has a loan account with XYZ Bank, which remains unpaid for last two months. The monthly EMI for the loan is Rs. 1 lakh. MM was managed by Mr. M, as a sole proprietor. MM has employed 7 persons, including 3 trainers, 1 accountant and 3 housekeeping staff. The salaries due to these employees were paid in half since the past four months. The housekeeping staff are covered under the definition of workmen. Mr. M made an application under Section 94 of the Insolvency and Bankruptcy Code, 2016 for initiation of insolvency resolution of MM. The Adjudicating Authority admitted the application and appointed P as resolution professional. The Adjudicating Authority considered the repayment plan approved by the creditors and rejected it. (i) Whether M could have applied for fresh start process? Explain with relevant provisions. (ii) In the above situation if a bankruptcy order is passed against MM, who shall prepare the list of creditors?
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2. (b) Mr. S, an advocate, is in the business of providing professional services like filing of petitions before Tribunals and Courts. Mrs. B, wife of Mr. S, is a registered Insolvency Professional (IP) with the IBBI. Mr. S, in his capacity of an advocate, filed many applications relating to admission of corporate debtors before NCLT and his wife Mrs. B being an insolvency professional in her own professional capacity acts as Insolvency Professional in all the cases her husband takes up. Mrs. B within 6 months of becoming Insolvency Professional accepted 15 such assignments. She does not have any prior experience as an Insolvency Professional. While considering one such application for initiation of CIRP, NCLT observed that the fees charged by Mrs. B for acting as insolvency resolution professional is exorbitant. Mrs. B contracted with the applicant to not only act as Interim Resolution Professional but also as Resolution Professional in all the 15 assignments that she accepted. With reference to the above-mentioned facts, answer the following question: (i) Is Mrs. B right in accepting the assignments when it was her husband who proposed her name? Justify your answer. (ii) What are the ethical norms as to timeliness laid down by regulations on insolvency professionals?
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3. (c) The Financial Creditors are contemplating to initiate insolvency proceedings on Mr. P, the personal guarantor to the Corporate Debtor. They have approached Mr. X to take up the assignment in relation to Mr. P. (i) What should Mr. X do? (ii) Who are personal guarantors?
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4. (d) Mr. X before accepting the assignment as an Interim Resolution Professional would have submitted Form 2 under rule 9 of IBBI (Application to Adjudication Authority) Rules, 2016. (i) What does Form 2 deal with? (ii) Who is eligible to be insolvency professional?
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Q.4 Q.4: Answer the following in detail, any three (39 Marks - 13 marks each)

1. (a) Discuss in detail about the Insolvency Professional Agency?
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2. (b) Explain the entire liquidation process under IBC 2016 in detail?
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3. (c) What are the main objectives of IBC 2016?
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4. (d) Write a note on Insolvency and Bankruptcy Board of India (IBBI)?
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5. (e) Explain in detail about the Committee of Creditors under IBC.
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