Mumbai University Solved Question Papers
Bankruptcy Laws
Previous Year Question Paper with Solution
BLS LLB 5 Years · Sem 8
Apr 2011 Examination
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BLS LLB 5 Years Sem 8 Bankruptcy Laws Apr 2011 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 Apr 2011 examination.
Contents
The questions below are the paper as the University of Mumbai set it at the Apr 2011 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 Apr 2011 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 3 hours · Total marks 100 · 25 questions answered
How to use this volume
Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.
Q.1
Q.1: Write short answer in not more than two sentences
20 Marks - 2 marks each
(a)Why is it said that acts of insolvency are statutory in nature?[2]
Answer
Because an act of insolvency exists only where the statute names it. Section 6 of the Provincial Insolvency Act, 1920 lists the acts. A court cannot treat any other conduct as an act of insolvency, however much it suggests that the debtor cannot pay.
What "statutory" means here.
- A closed list. Section 6(1) names eight acts, clauses (a) to (h). Section 6(2) adds failure to comply with an insolvency notice. Nothing else counts.
- Only the legislature adds to it. The insolvency notice became an act of insolvency only when Parliament inserted section 6(2) by Act 28 of 1978, with effect from 1 September 1979. No court could have created it.
- The wording varies by statute. Under the 1909 Act an attachment in execution lasting twenty-one days is an act of insolvency (section 9(1)(e) of the Presidency-towns Insolvency Act, 1909). The 1920 Act needs an actual sale. The acts are what each Act says.
- Strict proof. An act exposes a person to adjudication. So every element the clause names must be proved, including the intent where the clause requires it (section 24(1)(c)).
- The Code drops them. The Insolvency and Bankruptcy Code, 2016 works on default instead (section 78). That too is the legislature's choice.
Paramjeet Singh Patheja v. ICDS Ltd. (2006) 13 SCC 322: an insolvency notice founded on an arbitral award was held bad, because an award is not a "decree" for this purpose. The Supreme Court would not extend the statute by a legal fiction.
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