CAIIB Paper 4 Module C Quiz 4

The statutory definition of security interest is broad and includes specified rights in property created in favour of a secured creditor, such as mortgages, charges, hypothecation and assignment, subject to exclusions.

SARFAESI excludes a pledge of movables from its definition of security interest. A pledgee should consider remedies under the Indian Contract Act and other applicable law.

The Recovery Officer executes the recovery certificate according to the RDB Act and applicable rules, using prescribed modes of recovery.

The recovery framework allows statutory modes such as attachment and sale of property, appointment of a receiver and other prescribed measures, subject to due process.

SARFAESI and RDB Act remedies may coexist where statutory conditions are met. Recovery must comply with applicable law and cannot result in double recovery.

The IBC designates NCLT for corporate persons and DRT for individuals and partnership firms, subject to the Code’s commencement and applicable provisions.

IBBI is the regulator for key insolvency ecosystem participants, including insolvency professionals, insolvency professional agencies and information utilities. Adjudication is handled by the relevant tribunal.

An insolvency professional performs statutory functions such as managing the process, collecting claims, convening the CoC and facilitating resolution, while remaining subject to the Code and IBBI regulations.

The IBC shifts management powers as provided by law to the insolvency professional during CIRP, while the CoC makes key commercial decisions, including voting on resolution plans.

Section 31 provides that an approved resolution plan binds the corporate debtor and specified stakeholders, including employees, members, creditors, guarantors and other stakeholders covered by the provision.

Information utilities receive, store and authenticate financial information, including records of debt and default, supporting insolvency processes under the IBC.

The CoC is primarily composed of financial creditors, subject to provisions dealing with related parties, homebuyers and other special cases under the Code.

Operational creditors generally do not vote in the CoC unless they are also financial creditors. The Code provides attendance rights in certain circumstances, including when their aggregate dues meet the prescribed threshold.

The IBC includes provisions for personal guarantors to corporate debtors. The applicable forum and effect of proceedings depend on the Code and relevant judicial interpretation; a corporate debtor’s moratorium does not automatically cancel guarantees.

Section 14(3)(b) excludes a surety in a contract of guarantee to a corporate debtor from the moratorium’s operation. The precise remedy and other applicable law still matter.

CIRP commences on admission of the application by the adjudicating authority, which triggers statutory consequences including the moratorium and appointment of the interim resolution professional.

Section 238A applies the Limitation Act, 1963, as far as may be, to proceedings and appeals before the adjudicating authority, NCLAT, DRT and DRAT under the IBC.

Whether a settlement proposal constitutes acknowledgment depends on its language, context, signature/authority and whether it was made before limitation expired. It is not automatic.

The Act addresses evidentiary proof of bankers’ books. It does not generally eliminate other legal duties or procedural safeguards governing disclosure and inspection.

Proper certification, reliable record preservation and an audit trail help establish authenticity and compliance with the Bankers’ Books Evidence Act and applicable evidence rules.