Mumbai University Solved Question Papers
Bankruptcy Laws
Previous Year Question Paper with Solution
BLS LLB 5 Years · Sem 8
Jun 2023 - 60/40 Examination
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BLS LLB 5 Years Sem 8 Bankruptcy Laws Jun 2023 - 60/40 Question Paper with Solutions
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First published on munotes.in on 24 October 2026.
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The question paper reproduced here is the paper as set by the University of Mumbai at the Jun 2023 - 60/40 examination.
Contents
The questions below are the paper as the University of Mumbai set it at the Jun 2023 - 60/40 examination, in the order it was set.
MarksPage
MarksPage
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the Jun 2023 - 60/40 examination, reproduced as the University of Mumbai set them, in the order it set them. Nothing has been reworded, added or left out. Only the answers are ours. See the original question paper.
Duration 2 hours · Total marks 60 · 22 questions answered
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Q.1
Q.1: Answer any six of the following
12 Marks - 2 marks each
(a)What is an 'Onerous Property'?[2]
Answer
Onerous property is property in a bankrupt's estate that is a burden rather than an asset. The Explanation to section 160 of the Code defines it as:
- any unprofitable contract; and
- any other property comprised in the estate of the bankrupt which is unsaleable or not readily saleable, or is such that it may give rise to a claim.
Examples are a lease whose rent exceeds its value, or contaminated land that would expose the owner to clean-up claims.
The power to disclaim. Under section 160(1) the bankruptcy trustee may, by notice to the bankrupt or any person interested, disclaim onerous property. He may do so even after taking possession of it or trying to sell it (section 160(2)). The disclaimer:
- ends the bankrupt's rights, interests and liabilities in that property from the date of the notice; and
- discharges the trustee from personal liability for it from the date of his appointment (section 160(3)).
Two safeguards. The disclaimer does not affect the rights or liabilities of any other person. Anyone who suffers loss because of it is treated as a creditor of the bankrupt for that loss (section 160(5)). A person interested may also force the trustee to decide whether he will disclaim (section 161).
Under the old Acts. The Presidency-towns Insolvency Act, 1909 lets the Official Assignee disclaim onerous property within twelve months of adjudication (section 62). Examples are land burdened with onerous covenants, shares and unprofitable contracts. The Provincial Insolvency Act, 1920 has no disclaimer provision.
Present status. Part III is in force only for personal guarantors to corporate debtors (notification S.O. 4126(E) of 15 November 2019), as upheld in Lalit Kumar Jain v. Union of India (Supreme Court, 21 May 2021). So section 160 operates today only in their bankruptcies.
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