Module C

Unit 25
Resolution of Stressed

Assets under Insolvency &

Bankruptcy Code 2016

1. When was the Insolvency and Bankruptcy Code 2016 came into
effect?
(a) 28.05.2016
(b) 28.06.2016
(c) 28.07.2016
(d) 01.12. 2016
2. _______ is a situation where liabilities of an individual or an
entity exceed its assets and is unable to pay debt obligations.
(a) Insolvency
(b) Bankruptcy
(c) Indebtedness
(d) All of the above
3. What is the role of a trustee in the context of bankruptcy under
the Insolvency and Bankruptcy Code (IBC)?
A. To provide legal advice to the bankrupt entity or person.
B. To act as the resolution professional responsible for selling the
property of the bankrupt entity or person and discharging
obligations to creditors.
C. To lend money to the bankrupt entity or person to resolve
insolvency.
D. To represent the bankrupt entity or person in court
proceedings.
4. Which of the following statements accurately describes the process of
bankruptcy under the Insolvency & Bankruptcy Code (IBC)?
A. Bankruptcy is a voluntary process initiated by creditors, where the court
appoints a trustee to manage the debtor's finances without selling any
property.
B. Bankruptcy involves the legal recognition of insolvency, where a debtor
is adjudged bankrupt by an authority, & a trustee, known as the
resolution professional, is appointed to sell the property & settle debts
with creditors.
C. In bankruptcy under the IBC, the debtor retains control over their assets
& is responsible for paying off creditors according to a court-approved
plan.
D. Bankruptcy under the IBC is a process where the debtor's assets are
automatically transferred to the creditors without the intervention of a
court-appointed trustee.
5. Applicability of the provisions of the Code shall be applied to:
(a) Company incorporated under the Companies Act, 2013
(b) Limited Liability Partnership under Limited Liability
Partnership Act, 2008
(c) Personal Guarantors
(d) All of above
6. Who is Corporate Debtor as per the Code?
(a) Company who owes a debt to any person
(b) Corporate person who owes a debt to any person
(c) Company who borrows from any company
(d) Corporate person who owes a debt to any company
7. Insolvency Professional” means:
A.A person enrolled with an Insolvency Professional Agency as its member &
registered with the IBBI as an Insolvency Professional.
B. A person who has passed the Insolvency Exam conducted by the IBBI.
C. They are professionals licensed/registered by IBBI to undertake the role of
the Interim Resolution Professional (IRP), Resolution Professional (RP),
liquidator and/or bankruptcy trustee under any resolution process
initiated under the Code.
D.Both(A) and (C) are correct.
8. When is the applicability of the provisions of insolvency resolution and
liquidation on a corporate person?
(a) When the amount of the default is one crore rupees or more
(b) When the amount of the default is ten crore rupees or more
(c) When the amount of the default is two crore rupees or more
(d) Amount of default is immaterial
9. Who are the persons who may initiate Corporate Insolvency Resolution
Process (CIRP):
(a) Only Corporate Debtor
(b) Financial Creditor and Operational Creditor.
(c) Financial Creditor, Operational Creditor and Corporate Debtor.
(d) Corporate Debtor and Financial Creditor.
10. Who among the following is the Adjudicating Authority under the Code:
(a) Registrar of Companies
(b) Regional Director of Companies
(c) National Company Law Tribunal
(d) Debt Recovery Tribunal
11. Date of commencement of The Corporate Insolvency Resolution Process
shall be;
(a) Date of filing application before Adjudicating Authority
(b) Due date for payment which has not been met by the debt
(c) Date of admission of the application by the Adjudicating authority
(d) Date of communication of order by Adjudicating authority
12. Once the application is received, the adjudicating authority shall confirm
the existence of default within:
(a) 7 days
(b) 14 days
(c) 21 days
(d) None of the above
13. Corporate Insolvency Resolution process shall be completed within a
period of:
(a) 120 days from the date of admission of application
(b) 180 days from the date of admission of application
(c) 140 days from the date of admission of application
(d) 100 days from the date of admission of application
14. Which of the following is a Creditor as per the Code?
(a) Secured Creditor
(b) Unsecured Creditor
(c) Operational Creditor
(d) All the above
15. Which among the following statement is are correct w.r.t IBC ?
A. Each financial creditor will have a voting power proportionate to the
exposure to the corporate debtor.
B. Operational creditors have only observatory role in CoC except where
there are no financial creditors.
C. Quorum of CoC is 33% by value.
D. Critical matters are passed by the CoC with 90% majority and routine
matters with a 66% majority.
E. Withdrawal of Application for Resolution under section 12A requires 90%
majority of the Committee
A. Only A and B
B. A, B and C
C. A, B, C, and E
D. All of the above
16. The _________ is the adjudicating authority for insolvency
resolution process of corporate entities, namely, Companies, LLPs or
other corporate entities incorporated under any law in force.
A. National Company Law Tribunal (NCLT)
B. Company Law Board
C. Debtors Recovery Tribunal
D. None of these
17. _______ is the criteria for evaluating Resolution Plan & is prepared by
the RP in consultation with CoC. This is to be provided to the prospective
Resolution Applicants along with IM and other documents related to CD.
A. Evaluation Matrix
B. Expression of Interest
C. Recovery Matrix
D. None of these
18. The liquidator shall liquidate the corporate debtor within a period of
_____ year from the liquidation commencement date. Where the sale is
attempted under sub-regulation (1) of regulation 32A, the liquidation
process may take an additional period up to _____.
A. 2 years, 60 days
B. 1 years, 30 days
C. 1 year, 90 days
D. none of these
19. The liquidator shall not commence distribution before the ______ and
the ______ has been filed with the Adjudicating Authority.
A. list of stakeholders, asset memorandum
B. asset memorandum, list of stakeholders
C. Resolution Plan, list of stakeholders
D. None of these
20. When will liquidation process initiate automatically initiated under IBC,
2016?
a. The CIRP fails as no resolution plan is received or is not approved by the
CoC.
b. Any of the stakeholder defaults or deviates from terms of approved
Resolution Plan.
c. Creditors representing 66% of the outstanding financial debt resolve to
liquidate the corporate debtor at any time before the preparation of the
information memorandum (IM).
d. The corporate debtor contravenes the CIRP, and anyone prejudicially
affected applies for liquidation.
A. Only A and B
B. A, B and C
C. Only C
D. All of the above
21. Under Sec 29 A, which of the following persons
cannot be resolution applicant?
A. An undischarged insolvent. A.Only A and B
B. A willful defaulter. B. A, B and C
C. A person, who has been convicted for any offence C. Only C
punishable with imprisonment for at least 1 years. D.All the above
D. A person, disqualified to act as a director under
company's Act 2013.
E. A person, who is prohibited by SEBI from trading in
securities.
22. The Adjudicating Authority can allow the withdrawal of CIRP on an
application made by the applicant with the approval of _____ voting share
of the CoC, but before publication of expression of interest (EoI) for
submitting the resolution plan.
A. 51%
B. 33%
C. 90%
D. 66%
23. Public announcement of appointment of Interim resolution
professional shall be made :
(a) Within 5 days
(b) Within 7 days
(c) Within 3 days
(d) Within 14 days
24. Which of the following statements is true regarding Insolvency
Professional Agencies (IPAs) as per the Insolvency & Bankruptcy Code (IBC)?

A. IPAs are independent governmental organizations responsible for the

direct regulation of Insolvency Professionals (IPs).
B. Every Insolvency Professional (IP) must be a member of an IPA, and as of
now, there are three IPAs: the Institute of Company Secretaries of India,
the Institute of Chartered Accountants of India, and the Institute of Cost
Accountants of India.
C. Insolvency Professionals (IPs) can practice without being a member of
any IPA but must be registered with the IBBI.
D. There are over ten recognized IPAs in India, including legal and financial
institutions.
25. Which among the following statement is/are correct w.r.t Committee of
Creditors?
A. Financial Creditors are those who have lent money to the Corporate
Debtor (CD), meant for paying back, without any trade transaction.
B. Operational creditors are those who have supplied goods or services on
credit or those who have made advance payment of money to the CD in
consideration of receiving back goods or service.
C. The Committee of Creditors is a committee of, normally, only financial
creditors and is formed by the Interim Resolution Professional based on
the claims received from the creditors.
D. Each financial creditor will have a voting power proportionate to the
exposure to the corporate debtor. Operational creditors have only
observatory role in CoC except where there are no financial creditors.
E. All of the above
26. What is the role of Information Utilities (IUs) under the Insolvency and
Bankruptcy Code (IBC)?
A. IUs are responsible for providing legal advice to entities undergoing Corporate
Insolvency Resolution Process (CIRP).
B. IUs act as reservoirs of financial information, pooling data from various sources,
authenticating it, and making it accessible through a Central Application
Programming Interface (CAPI).
C. Information Utilities are tasked with the distribution of funds recovered during
the insolvency resolution process.
D. IUs function as regulatory bodies overseeing the conduct of Insolvency
Professionals (IPs) and Insolvency Professional Agencies (IPAs).
27. NCLT is the Adjudicating Authority for _____.
A. Companies
B. Proprietors
C. Individual’s
D. All the above
The National Company Law Tribunal (NCLT) is the adjudicating authority for insolvency
resolution process of corporate entities:-
• Companies,
• LLPs or
• other corporate entities.
The Debt Recovery Tribunal (DRT) is the adjudicating authority for non-Corporate entities
• Individuals,
• Proprietors,
• Partners of a Partnership.
Appellate authorities are National Company Law Appellate Tribunal (NCLAT) and Debt
Recovery Appellate Tribunal (DRAT) for orders of NCLT and DRT respectively.
28. What is the role of the Interim Resolution Professional (IRP) in the
context of the Insolvency and Bankruptcy Code (IBC)?
A. The IRP takes over the responsibilities of the CEO & Board of Directors of
the Corporate Debtor (CD), ensuring the company continues to operate.
Their appointment is temporary until the Committee of Creditors (CoC)
decides on a regular Resolution Professional.
B. The IRP is a permanent appointment made by the Financial Creditor (FC)
or Corporate Debtor (CD) to manage the finances of the CD during the
insolvency process.
C. The IRP is an optional appointment made by Operational Creditors (OC)
to represent them in insolvency proceedings, and their role is limited to
financial advice.
D. The IRP is responsible for liquidating the assets of the Corporate Debtor
and distributing the proceeds among the creditors.
29. What actions are prohibited during the moratorium period declared
by the National Company Law Tribunal (NCLT) in the insolvency process?
A. During the moratorium period, the Corporate Debtor is allowed to
transfer assets and initiate foreclosure proceedings.
B. The moratorium declared by the NCLT prevents the institution of suits,
transfer of assets, foreclosure, recovery, or enforcement actions under
SARFAESI, and recovery by owners of property or assets in possession
of the Corporate Debtor.
C. The moratorium only restricts the transfer of assets by the Corporate
Debtor but allows for the institution of suits and foreclosure
proceedings.
D. During the moratorium, the Corporate Debtor is required to liquidate
assets to pay off creditors as quickly as possible.
30. What happens in the Corporate Insolvency Resolution Process when an
Operational Creditor does not propose a name for the appointment of an IRP?
A. The NCLT automatically dismisses the CIRP application.
B. The NCLT, in consultation with the Insolvency and Bankruptcy Board of India,
appoints an IRP within 14 days of admitting the CIRP.
C. The Operational Creditor is given an additional 30 days to propose a name for
the IRP.
D. The Corporate Debtor is allowed to propose an IRP in place of the Operational
Creditor.
31. The powers of the board of directors shall stand suspended from the
date of _______.
A. The resolution passed by the shareholders.
B. The appointment of the Interim Resolution Professional (IRP).
C. The admission of the Corporate Insolvency Resolution Process (CIRP) by
the National Company Law Tribunal (NCLT).
D. The final decision of the Insolvency and Bankruptcy Board of India
(IBBI).
32. Within ___ days of appointment, the Interim Resolution Professional
(IRP) must make a Public Announcement of the commencement of
Corporate Insolvency Resolution Process (CIRP) and invite all creditors to
submit their claims and proof of claims within ___ days from the date of
the announcement.
A. 3 days; 11 days
B. 5 days; 14 days
C. 7 days; 10 days
D. 10 days; 7 days
33. The Committee of Creditors (CoC), constituted by the Interim
Resolution Professional (IRP) based on claims received from Financial
Creditors, must meet within ___ days of its constitution.
A. 3 days
B. 7 days
C. 14 days
D. 10 days
34. Which of the following statements is correct regarding the composition of
the CoC in a Corporate Insolvency Resolution Process when there are no
financial creditors other than related parties?
A. The CoC will consist solely of the 18 largest operational creditors by value,
plus one representative elected by most shareholders, & 1 representative
from the company's senior management.
B. The CoC is formed only by the top 10 operational creditors by value and
does not include any representatives from workmen or employees.
C. The CoC comprises the 18 largest operational creditors by value, one
representative elected by all workmen not included among the top 18
operational creditors, and one representative elected by all employees not
included among the top 18 operational creditors.
D. All operational creditors are part of the CoC, along with two government-
appointed representatives to ensure fair proceedings.
35. What is the procedure if the CoC decides to replace the IRP?
A. The IRP must immediately convene a meeting with the shareholders to
discuss the CoC's decision.
B. The IRP will immediately file the CoC's resolution for the appointment of a
new RP along with a consent letter from the proposed RP with the NCLT.
C. The CoC directly informs the NCLT of its decision, bypassing the IRP.
D. The IRP must obtain approval from the IBBI before filing the CoC's
resolution with the NCLT.
36. The Resolution Professional is required to determine the fair value
and liquidation value of the CD by appointing 2 valuers, who are
registered with IBBI. This activity must be done within _____ of
appointment.
A. 3 days
B. 5 days
C. 7 days
D. 14 days
37. The valuation information received by the Resolution Professional
(RP) must be kept confidential and can only be disclosed to members of
the Committee of Creditors (CoC) against a ___ from each member.
A. Written consent
B. Financial guarantee
C. Non-Disclosure Agreement (NDA)
D. Legal affidavit
38. By what day from the insolvency commencement date must the
Resolution Professional (RP) publish an invitation for the expression of
interest from prospective resolution applicants?
A. 30th day
B. 45th day
C. 60th day
D. 75th day
39. Within how many days of issuing the provisional list to prospective
resolution applicants must the Resolution Professional (RP) issue copies
of the Information Memorandum, evaluation matrix, and a request for
resolution plans?
A. 2 days
B. 5 days
C. 10 days
D. 15 days
40. What is the minimum time limit allowed for a Resolution Applicant
(RA) to submit a resolution plan?
A. 15 days
B. 20 days
C. 30 days
D. 45 days
41. Under what circumstances will the Adjudicating Authority order the
liquidation of the Corporate Debtor?
A. If the Resolution Professional (RP) recommends liquidation due to the low
quality of resolution plans.
B. If no resolution plan is received by the RP or the received plans do not
garner the required 66% votes from the Committee of Creditors (CoC).
C. If the resolution plans received are not compliant with the Act and Rules,
regardless of the CoC's votes.
D. Liquidation is ordered if the resolution plans do not fully cover the
operational creditors' claims.
42. Insolvency and bankruptcy Resolution process can be initiated when a
Corporate Debtor commits a default of Rs. _____ crore or more.
A. 1
B. 3
C. 2
D. 6
43. What actions must the Liquidator take immediately upon appointment during
the liquidation of a Corporate Debtor?
A. The Liquidator should negotiate with the major creditors for a potential revival
of the CD.
B. The Liquidator makes a public announcement in 1 English & 1 regional
language newspaper, indicating CD’s liquidation, & invites proof of claims from
stakeholders within 5 days.
C. The Liquidator must first seek approval from the NCLT before making any
public announcements or calling for claims.
D. The Liquidator is required to sell off the key assets of the CD within the first 5
days of appointment.
44. How can a person who claims a stake in the Corporate Debtor (CD)
submit their claim during the liquidation process?
A. Claims can only be submitted electronically, regardless of the type of
creditor.
B. Financial creditors are required to submit their claims electronically,
while other claimants can submit theirs in person, by post, or
electronically.
C. All claims must be submitted in person at the office of the Liquidator.
D. Claims are only valid if submitted through a legal representative or
attorney.
45. Which of the following can be used to prove the existence of debt due
to an operational creditor?
A. Only a court order adjudicating non-payment of a debt.
B. Records available with an information utility, a contract for the supply of
goods and services with the corporate debtor, an invoice, an order of a
court or tribunal, or financial accounts.
C. Solely the financial accounts of the corporate debtor.
D. Only a signed agreement between the operational creditor and the
corporate debtor.
46. What evidence can be provided to prove the existence of debt due to a
financial creditor?
A. Only a legally binding loan agreement between the financial creditor and the
corporate debtor.
B. Records available with an information utility, a financial contract supported by
financial statements, records showing amounts drawn by the corporate debtor,
financial statements showing unpaid debt, or a court order on non-payment of
debt.
C. Solely the financial statements of the corporate debtor.
D. A verbal agreement or informal acknowledgment of debt by the corporate
debtor's board of directors.
47. What additional requirement must a secured creditor meet to prove her
claim as secured credit?
A. A secured creditor must present a personal guarantee from the CEO of
the corporate debtor.
B. A secured creditor is required to produce a certificate of registration of
charge issued by the Registrar of Companies (ROC).
C. The only requirement is a signed affidavit from the financial creditor
stating the security of the claim.
D. Secured creditors must provide collateral valuation reports in addition to
the debt claim.
48. What information is included in the list of stakeholders prepared by the
liquidator?
A. Only the names and contact details of the stakeholders.
B. The amounts of claim admitted, the security status of the debts, details of
the stakeholders, and the status of the proofs of claims (admitted,
partially rejected, or wholly rejected).
C. The list includes only the amounts of claim admitted and the details of
the guarantors of the corporate debtor.
D. The financial history of the stakeholders and the expected recovery
percentage from the liquidation process.
49. Within how many days from the last date for receipt of claims must the liquidator
file the list of stakeholders with the Adjudicating Authority, and how is this list made
accessible?
A. Within 30 days; the list is only accessible to the liquidator and the Adjudicating
Authority.
B. Within 45 days; the list is available for inspection by claimants, members, partners,
directors, guarantors of the corporate debtor, displayed on the corporate debtor's
website if any, and filed on the electronic platform of the Board.

x
C. Within 60 days; the list is published in major newspapers for public viewing.
D. Immediately after preparation; the list is confidential and not accessible to
stakeholders.
50. On formation of the liquidation estate under section 36, the liquidator
shall prepare an asset memorandum in accordance with this Regulation
within ____ from the liquidation commencement date.
A. 45 days
B. 50 days
C. 75 days
D. 90 days
51. The liquidator shall submit a Preliminary Report to the Adjudicating
Authority within ______ from the liquidation commencement date.
A. 45 days
B. 50 days
C. 75 days
D. 90 days
52. The liquidator has to constitute a stakeholder consultation committee
within _____ from the liquidation commencement date, based on the list of
stakeholders prepared, to advise on matters.
A. 60 days
B. 75 days
C. 90 days
D. None of these
53. How many representatives may unsecured financial creditors have in the
liquidation process when their claims admitted are at least 25% of the
liquidation value?
A. None
B. One
C. Two
D. Four
54. If secured financial creditors, who have relinquished their security
interests under section 52, have their claims admitted during the liquidation
process to be less than 50% of the liquidation value, what is the maximum
number of representatives they can have?
A. One
B. Two
C. Three
D. Four
55. What is the maximum number of representatives allowed for
operational creditors other than workmen, employees, and governments
when their claims admitted during the liquidation process are less than 25%
of the liquidation value?
A. None
B. One
C. Two
D. Three
56. How many representatives do shareholders or partners have in the
liquidation process, regardless of the value of their claims?
A. None
B. One
C. Two
D. According to the percentage of their share or partnership in the
company.
57. Within how many days after the end of the quarter must the liquidator
submit the first Progress Report to the Adjudicating Authority?
A. 7 days
B. 15 days
C. 30 days
D. 45 days
58. If an insolvency professional ceases to act as a liquidator during the
liquidation process, within how many days must she file a Progress Report
for the quarter up to the date of her cessation?
A. 7 days
B. 15 days
C. 30 days
D. Immediately upon cessation
59. What should the Progress Reports provided by the liquidator include?
A. Only the settlement of the list of stakeholders and details of fee or
remuneration.
B. Details of property sold, unsold property distribution, and changes in
estimated liquidation costs.
C. A detailed account of receipts and payments during the quarter and a
statement of progress in liquidation.
D. Solely the details of any material litigation involving the corporate
debtor.
60. What does the liquidator need to include in the Progress Reports
regarding remuneration?
A. The remuneration or fee paid only to the liquidator.
B. The remuneration or fee paid to professionals appointed by the
liquidator and any other expenses incurred.
C. Only a general statement about the remuneration without specific
details.
D. Details of the fee due to and received by the liquidator, including a
description of activities carried out.
61. The Progress Report for which quarter shall enclose audited accounts of
the liquidator’s receipts and payments for the financial year?
A. 1st
B. 2nd
C. 3rd
D. 4th
62. What is the role of the Resolution Professional (RP) after receiving all the
resolution plans?
A. The RP must immediately implement the most financially viable resolution
plan.
B. The RP, after ensuring compliance with the Act and Rules, must submit the
resolution plans to the CoC for evaluation.
C. The RP should negotiate with the resolution applicants to improve their
offers before presenting them to the CoC.
D. The RP has the authority to reject any resolution plan that does not meet
the company's immediate financial needs.
63. What defines a preferential transaction under the avoidance of historical
transactions in insolvency proceedings?
A. A transaction where the borrower gives preference to a creditor, resulting
in a beneficial position for that creditor.
B. A transaction where the borrower equally distributes assets among all
creditors.
C. A transaction that occurs in the normal course of business, without any
special treatment to any party.
D. A transaction where the borrower repays the loan in full to one creditor
while others receive nothing.
64. Which of the following is considered an undervalued transaction that can
be avoided during insolvency proceedings?
A. A transaction that reflects the true market value of the service or asset at
the time.
B. A transaction where the borrower enters into a deal that is at a fair value
and occurs in the ordinary course of business.
C. A transaction where the borrower enters into a deal that is less than the
value of the transaction if conducted at arm's length.
D. A transaction that is profitable for the borrower and conducted in
compliance with the law
65. What characterizes a fraudulent transaction in the context of avoidance of
historical transactions?
A. A transaction entered with the intention of providing a gift to a friend or
family member.
B. A transaction that is deliberately entered into by the borrower to defraud
and provide an unfair advantage to one of the creditors.
C. A transaction that is fair and equitable to all parties involved without any
intention to deceive.
D. A transaction that is conducted transparently and with the consent of all
creditors.
66. What is considered an extortionate credit transaction that may be avoided
according to the insolvency code?
A. A transaction that is agreed upon under normal credit terms and does not put
pressure on the borrower.
B. A credit transaction that is favourable to the borrower & involves low interest
rates.
C. A transaction where the borrower is part of a credit agreement that complies
with the standard legal procedures.
D. An extortionate credit transaction where the borrower is part of an agreement
that is not in compliance with the law and involves the receipt of financial or
operational debt.
67. How is the Liquidation Value of the Corporate Debtor determined ?
A. The Liquidation Value is the sum of estimates from two registered valuers
appointed by the Liquidator.
B. If there's a significant difference in estimates from the two registered valuers, the
resolution professional must accept the higher value.
C. The Liquidation Value is determined by the average of the two closest estimates
provided by the registered valuers appointed by the Liquidator.
D. The resolution professional has the discretion to determine the Liquidation Value
without any estimates from registered valuers.
67. In the liquidation process, which of the following correctly represents the order of priority for the
distribution of the liquidation proceeds?
A. Secured creditors, government dues, unsecured financial creditors, workmen's dues, employees'
dues, preference shareholders, equity shareholders or partners.
B. Insolvency resolution process costs, secured creditors (who relinquished security), workmen's
dues, employee wages and unpaid dues, financial debts to unsecured creditors, government
dues, remaining debts, preference shareholders, equity shareholders or partners.
C. Preference shareholders, equity shareholders or partners, government dues, secured creditors,
workmen's dues, employee wages and unpaid dues, financial debts to unsecured creditors.
D. Government dues, secured creditors, workmen's dues, employee wages and unpaid dues,
financial debts to unsecured creditors, preference shareholders, equity shareholders or partners,
insolvency resolution process costs.
68. What is the standard period for the liquidator to complete the liquidation
of a CD, & what steps should be taken if this period cannot be met?

A. The liquidator has a period of 6 months to liquidate the corporate debtor,

& if not completed, an extension must be requested from the Authority.
B. The liquidator should complete the liquidation within 1 year from the
liquidation commencement date, but if the liquidation is not completed
within this period, she must apply to the Authority for an extension,
explaining why additional time is needed.
C. The liquidator has 2 years to liquidate the corporate debtor, with no
requirement for extension applications.
D. If the liquidation is not completed within 1 year due to the sale being
attempted under regulation 32A, the liquidator may take an additional
period up to 90 days without applying for an extension.
69. What is the purpose of the final report submitted by the liquidator to
the Adjudicating Authority?
A. To request an extension for the liquidation process.
B. To account for the liquidation process and apply for either the closure
of the liquidation process where the corporate debtor is sold as a going
concern or for the dissolution of the corporate debtor in other cases.
C. To challenge the claims made by creditors during the liquidation
process.
D. To finalize the sale of assets without the need for any further action.
70. What action is taken by the Adjudicating Authority after the liquidator applies for
the dissolution of the Corporate Debtor?
A. The Adjudicating Authority orders the immediate reinstatement of the Corporate
Debtor.
B. The Adjudicating Authority conducts a review of the liquidation process before
making any decisions.
C. The Adjudicating Authority orders the dissolution of the Corporate Debtor, and
the entity ceases to exist from the date of the order, with a copy sent to the
Registrar of Companies (RoC) within 7 days.
D. The Adjudicating Authority requests additional documentation from the liquidator
before proceeding with the dissolution.
71. What are the requirements for a liquidator when managing the liquidation
proceeds of a corporate debtor?
A. The liquidator must open a bank account in any bank for the receipt of all monies
due to the corporate debtor and can maintain unlimited cash for liquidation costs.
B. The liquidator is required to open a bank account specifically in the name of the
corporate debtor 'in liquidation', deposit all monies including cheques & demand
drafts daily, and can maintain a cash of 1 lakh rupees or as permitted for costs.
C. The liquidator can hold all liquidation proceeds in a personal account and
distribute them without the need for depositing into a separate bank account.
D. The liquidator should distribute all proceeds immediately upon receipt without
depositing them into a bank account.
72. What condition must be met before the liquidator commences the
distribution of assets?
A. The liquidator can commence distribution as soon as the liquidation process
starts, without any conditions.
B. Distribution can begin after all claims by creditors have been fully satisfied.
C. The liquidator must not start distribution before the list of stakeholders &
the asset memorandum have been filed with the Adjudicating Authority &
must distribute the proceeds within 90 days from realization.
D. Distribution should only commence after receiving approval from all
stakeholders.