Mumbai University Solved Question Papers
Bankruptcy Laws
Previous Year Question Paper with Solution
LLB 3 years · Sem 4
Jun 2018 Examination
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LLB 3 years Sem 4 Bankruptcy Laws Jun 2018 Question Paper with Solutions
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First published on munotes.in on 24 October 2026.
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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 Jun 2018 examination.
Contents
The questions below are the paper as the University of Mumbai set it at the Jun 2018 examination, in the order it was set.
MarksPage
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the Jun 2018 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
Instructions printed on the paper
- N.B: Please check whether you have got the right question paper.
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 answers in two sentences
20 Marks - 2 marks each
(a)Who is a secured creditor?[2]
Answer
Under the Code. Section 3(30) defines a secured creditor as "a creditor in favour of whom security interest is created". A security interest is a right, title or interest, or a claim to property, created in favour of a secured creditor by a transaction that secures payment or performance of an obligation. It includes a mortgage, charge, hypothecation, assignment and encumbrance (section 3(31)).
Two qualifications apply.
- A performance guarantee is not a security interest (proviso to section 3(31)).
- Since 26 May 2026 a security interest exists only if created by agreement between two or more parties, not merely by operation of law (Explanation to section 3(31)). This reverses State Tax Officer (1) v. Rainbow Papers Ltd. (Supreme Court, 6 September 2022), which had treated a State with a statutory tax charge as a secured creditor.
In liquidation a secured creditor may relinquish its security or realise it (section 52). In bankruptcy it may realise its security unaffected by the order (section 128(2)).
Under the old Insolvency Acts. The Provincial Insolvency Act, 1920 defines a secured creditor as "a person holding a mortgage, charge or lien on the property of the debtor or any part thereof as a security for a debt due to him from the debtor" (section 2(1)(e)). The adjudication does not affect his power to realise or deal with his security (section 28(6)). Those Acts still govern individuals other than personal guarantors to corporate debtors.
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