CAIIB Paper 4 Module C Quiz 10

Timely documentation of acceptance, objections and invoices is important. Ignoring statutory timelines can expose a buyer to interest and MSEFC proceedings.

The MSMED Act caps the agreed period in a written agreement at 45 days. Where no agreement exists, the Act’s appointed-day rules apply; a buyer cannot rely on an unlimited oral delay.

Section 17 generally allows an aggrieved person 45 days from the date of the measure under section 13(4) to apply to the DRT.

Section 34 restricts civil court jurisdiction over matters entrusted to the DRT/DRAT and limits injunctions. The DRT remedy under section 17 is central to challenges against section 13(4) measures.

The NCLAT is the appellate tribunal for NCLT orders under the IBC, subject to the Code’s provisions on who may appeal and the prescribed timeline.

IBC is designed as a collective process for insolvency resolution/liquidation and stakeholder coordination. A conventional recovery suit focuses on adjudication and recovery of a claim.

The bank should conduct a documented limitation analysis, including acknowledgments, part-payments, applicable articles and possible statutory exclusions. Records must never be falsified or destroyed to evade limitation.

Section 18 requires a written and signed acknowledgment of liability made before expiry of the existing limitation period, starting a fresh period from the date of signature.

The bank should establish that the signatory had authority to acknowledge liability for the company. The validity of the acknowledgment depends on authority, wording and timing.

A mortgage enforcement claim and a claim under a personal guarantee may be governed by different limitation articles and accrual rules. Each should be analysed independently.

The authorised officer certifies the copy/record in the prescribed manner. The certificate supports evidentiary admissibility; it does not decide the legal merits.

The Act establishes legal services authorities and provides for Lok Adalats and related mechanisms to promote access to justice under statutory conditions.

Lok Adalats do not have jurisdiction over matters relating to offences that are not compoundable under law, even if parties wish to settle.

Permanent Lok Adalats have a special jurisdiction for public utility service disputes. After attempting conciliation, they may decide the dispute on merits within statutory limits if settlement fails.

A precise written settlement supported by account records and properly authorised signatories reduces ambiguity and supports a clear award and enforceability.

Section 16 prescribes compound interest with monthly rests at three times the bank rate notified by RBI, subject to the statutory circumstances.

The availability of the Act’s delayed-payment protection depends on whether the supplier meets the statutory definition and applicable registration/classification requirements. This should be verified from reliable records.

The CoC exercises commercial judgment on plan approval, while NCLT examines compliance with section 30(2) and other statutory requirements. The tribunal’s role is not to replace commercial wisdom with its own.

The interim resolution professional performs statutory duties after admission, including managing the corporate debtor’s affairs as prescribed, receiving claims and constituting the CoC.

Liquidation is ordered under section 33 when statutory grounds arise. It is not an automatic consequence of every default and must follow the Code’s process.