Mumbai University Solved Question Papers
Bankruptcy Laws
Previous Year Question Paper with Solution
LLB 3 years · Sem 4
Dec 2012 Examination
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LLB 3 years Sem 4 Bankruptcy Laws Dec 2012 Question Paper with Solutions
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First published on munotes.in on 24 October 2026.
Published by munotes.in, Mumbai.
Model answers written and edited by the munotes.in editorial desk.
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The University does not publish an official answer key for this paper. The answers in this volume are model answers, written to show how a full-mark answer is built. They are a study aid, not an authority on what an examiner marked.
The question paper reproduced here is the paper as set by the University of Mumbai at the Dec 2012 examination.
Contents
The questions below are the paper as the University of Mumbai set it at the Dec 2012 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 Dec 2012 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 answers in not more than two sentences
20 Marks - 2 marks each
(a)What is the meaning of the expression "Act of Insolvency"?[2]
Answer
An act of insolvency is an act or event, listed in the Act, that shows a debtor is unable or unwilling to pay his creditors. A petition to adjudge him insolvent can be founded on it. Section 6 of the Provincial Insolvency Act, 1920 lists them, and the court can adjudge a debtor only "if a debtor commits an act of insolvency" (section 7).
The acts (section 6(1)). A debtor commits an act of insolvency if he:
- transfers all or substantially all his property to a third person for the benefit of his creditors generally;
- transfers property with intent to defeat or delay his creditors;
- makes a transfer that would be void as a fraudulent preference;
- departs, absents or secludes himself with intent to defeat or delay his creditors;
- has property sold in execution of a money decree;
- petitions to be adjudged insolvent;
- gives notice to a creditor that he has suspended, or is about to suspend, payment; or
- is imprisoned in execution of a money decree.
The insolvency notice (section 6(2)). Since 1 September 1979, it is also an act of insolvency to fail to comply with an insolvency notice served by a decree-holder on a final money decree.
Why the timing matters. A creditor's petition must be founded on an act committed within three months before it (section 9(1)(c)).
In Paramjeet Singh Patheja v. ICDS Ltd. (2006) 13 SCC 322 the Supreme Court held that acts of insolvency are strictly construed: a notice founded on an arbitral award, not a decree, does not create one.
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