2. INDIAN INSTITUTE OF BANKING & FINANCE JAIIB MODULE (C & D) LEGAL ASPECTS OF BANKING OPERATIONS Saturday 19,April, 08 T M C VASUDEVAN

3. 01.. Identify which one is correct. A.. A contract of indemnity has two persons B.. A contract of guarantee also has two persons. C.. A minor can take a loan as a borrower D.. A pledge in respect of company advance has to be registered with ROC.

4. 02..The award of a Banking Ombudsman will be reviewed by A.. The Executive Director of RBI B.. The Deputy Governor in charge of Rural Planning and Credit Department of RBI. C.. The Finance Secretary D.. The Banking Ombudsman himself

5. 03..Which is not correct (Banking Ombudsman) A.. The maximum amount the Banking Ombudsman can award as compensation is Rs.10 lacs. B.. Limitation period for filing of the review application is one month. C.. Failure to honor guarantee does not come under its purview. D.. None of the above

6. 04..SARFAESI Act 2002, extends to whole of India including the State of Jammu & Kashmir. Also applicable to housing finance companies... The act is effective from 21.06.2002. It also covers the earlier loans which were outstanding.

7. 05..Based on the observation of the Supreme Court in the Mardia Chemicals vs Union of India case, the Government of India issued notification amending the provisions of the SARFAESI Act. The amendment stipulates payment of 50% amount instead of 75% as originally enacted. (When appealed)

8. 06... Take over of loans or advances from the Bank or Financial Institution for the purpose of recovery is known as Asset reconstruction.. The word Board is used in the Act refers to the Securities and Exchange Board of India (SEBI)

9. 07..Bank T has lent to S a sum of Rs.2 lacs on the hypothecation of a van.. Who is the Originator as per the provisions of the SARFAESI Act. a.. Borrower S b.. Creditor T c.. Both are not Originators d.. SEBI

10. 08..Default should have been committed by the debtor.. The borrower’s account should have been classified as NPA as per the guidelines of RBI.. The Act is applicable only to a Secured creditor and not to an unsecured creditor

11. 09.. Obligor is a person liable to pay to the lender (originator). As per the contract terms and conditions or otherwise. He has to discharge any obligation in respect of a financial asset whether existing, future, conditional or contingent or and includes a borrower.

12. 10.. Not considered as Qualified Institutional Buyer a.. Bank b.. Insurance company c.. Individual Investor d.. An Asset Management Company

13. 11...Which one is not pertaining to Hypothecation. a.. A charge in or upon any movable property b.. Right in favour of the creditor c.. Possession also with the lender d.. Retaining the ownership with the owner of the property

14. 12.. The securitization company or reconstruction Company to raise funds from qualified institutional buyers by formulating schemes..Separate scheme wise accounts to be Maintained..The Scheme invites subscription to security receipts proposed to be issued by such company under the scheme.

15. 13.. Bank X is the secured creditor and U is the borrower and defaulter The branch head is R. U has given his land as security which is under his possession. The outstanding liability is shown under NPA. Identify the Obligor & Originator. a.. X and U respectively b.. X and R respectively c.. U and X respectively d.. R and U respectively

16. 14.. Who will receive the Security receipt from whom.? (SARFAESI Act) a.. Secured Creditor from Principal Debtor b.. Institutional Investor from Securitisation company. c.. Securitization company from Institutional investor d.. Secured Creditor from Securitization company

17. 15.. RGH, the secured creditor. After completing the formalities / procedures (as per SARFAESI ACT) the assets mortgaged by KWY were purchased by a Securitisation and reconstruction company called JFI for Rs.27 lacs. Then a.. JFI will issue a security receipt RGH b.. RGH will receive debentures from JFI c.. KWY will issued security receipts to JFI. d.. RGH will get debentures from KWY

18. 16...In Mardia Chemicals vs Union of India Supreme Court as declared that A.. SARFAESI Act is Constitutionally valid B.. Except a part of Section 17(2) C.. To Deposit 75% for appeal, the Apex court was not in favour D.. All the above

19. 17.. A reconstruction company A.. is engaged as property developer B.. is formed for the purpose of asset reconstruction C.. is registered with SEBI D.. is not registered under the Companies Act

20. 18.. The Government of India has A.. issued an order B.. issued a notification amending the Sec17(2) of SARFAESI Act. C.. Instead of 75%, the borrower filing an appeal has to deposit 50% D.. Both B & C are appropriate

21. 19..A Life Insurance company, a Nationalised bank and a foreign institutional investor have formed a Company to invest in Securitisation company as qualified institutional buyer. Then they will have to a.. Register with SEBI B.. Register with SEBI is not a must C.. Register with SEBI is a must D.. Register with SEBI when directed only

22. 20.. DEF a Securitisation and reconstruction company acquired financia l asset from MNO secured creditor. On account of this transaction DEF would become A.. Purchaser B.. Seller C.. Owner D.. None of these

23. 21..The regulatory authority for Securitisation and reconstruction company is a.. Company Law Board b.. Concerned Registrar of Companies c.. SEBI d.. None of these

24. 22...The Securitisation Company not only to be registered under the Companies Act but also needs registration from RBI as per A.. RBI Act B.. Companies Act C.. SARFAESI Act D.. SEBI Act

25. 23.. A person who is holding 12% of the paid up equity capital of the reconstruction company is known as A.. Sponsor B.. Obligor C.. Originator D.. Institutional investor

26. 24.. Identify the beneficiaries of the trusts formed by Securitisation compnay. ACE is the Securitisation company. GHY is the Secured creditor. BDF is the Institutional investor. a.. GHY b.. BDF c.. ACE d.. None of them

27. 25.. A security receipt is A.. Similar to Bank’s Fixed Deposit receipt B.. Issued by Securitisation Company C.. Issued to Securitisation Company D.. Issued to a Secured Creditor

28. 26... The Securitisation company can acquire financial asset without execution of any deed of assignment or transfer in its favour by the original creditor. A.. True B.. False C.. Without agreement it cannot be legally valid D.. Deed of Assignment is a must.

29. 27.. Debenture as per the provision of SARFAESI A.. Appears on the left hand side of the balance sheet B.. It is shown as liability representing commitment C.. It is for payment of consideration to be paid to the bank for acquisition of financial asset from it D.. It represents the money borrowed.

30. 28.. Identify the incorrect one (Reconstruction Company) A.. It has to obtain registration certificate from RBI. B.. It has to have minimum capital of Rs.100 crores at the time of registration C.. It can formulate separate schemes for acquisition of financial assets D.. It has to disclose the risk factors to the investors.

31. 29.. The Security receipt (not having any interest or right and so on in immovable property) issued to the holder by the Securitisation company attract registration as per the Registration Act,1908. A.. True B.. False C.. Registration compulsory for such receipts. D.. None of the above

32. 30.. If there is a dispute among the bank, securitisation company and the qualified institutional buyer, then the same to be settled by conciliation or arbitration as provided in the A.. Reserve Bank of India Act B.. SARFAESI Act C.. Arbitration and Conciliation Act D.. Both a & c

33. 31..An institutional investor NG wish to transfer the security receipt (Which has an undivided interest in the financial asset) to MV. a.. Registration under the Registration Act required. b.. Registration optional c.. Registration need not be insisted. d.. Registration of Security receipts does not arise.

34. 32.. The power given to the secured creditor, as creditor has overriding effect over the provisions related to mortgage in A.. The Registration Act B.. The Contract Act C.. The SARFAESI Act D.. The Transfer of Property Act

35. 33..The Securitisation company can set up separate trusts scheme wise and act trustees for such schemes as provided in the Securitisation Companies and Reconstruction Companies (Reserve Bank) Guidelines and Directions,2003. The beneficiaries of such trusts are a.. Debenture holders b.. Lending bankers c.. Debtors d.. None of them

36. 34..Acquisition of financial asset from the originator, by Securitisation or reconstruction company is known as a.. Reconstruction b.. Securitisation c.. Transfer of Assets d.. Purchasing

37. 35.... Securitisation company is a company registered under the Companies Act,1956 for the purpose of securitisation. It also needs registration from RBI under the provisions of SARFAESI Act... Security agreement includes an agreement, instrument or any other document or arrangement under which security interest is created in favor of secured creditor

38. 36.. The minimum capital requirement for securitisation or reconstruction company, at the time of registration is a.. Rs. 35 Crore b.. Rs. 55 Crore c.. Rs.105 Crore d.. None of the above

39. 37..E has created a mortgage by way of deposit of title deeds with the secured creditor bank J. This represents a.. Security Receipt b.. Secured Debenture c.. Security Agreement d.. Secured Debt

40. 38..Secured debt means a debt which is secured by any security interest...Secured Asset means the property on which security interest is created... The powers given by SARFAESI Act for enforcement of securities are against secured assets only

41. 39..Security Receipt is issued a.. To Borrower by the Bank b.. To Qualified Institutional buyer by the Reconstruction Company c.. To Creditor by the Securitisation Company d...To Reconstruction company by the Securitisation Company

42. 40..Which one is appropriate. (SARFAESI) a..B D F is the institutional investor and will receive Debentures b.. KRT is the Securitisation company will issue Security receipt as well as Debentures c.. GU is the Secured creditor and will receive security receipt d.. MNP, a borrower of the bank will issue Debenture in lieu of payment towards outstanding

43. 41....The security receipt evidences the purchaser’s undivided right, title and interest in the security...These receipts are transferable in the market... Sponsor is a person holding not less than 10% of the paid up capital of securitisation or reconstruction company.

44. 42....Depending on the nature of security asset RBI has the powers to specify different amounts of owned funds for different companies...The company can formulate separate schemes for acquisition of financial asset...The securitisation or reconstruction company can act as trustees for such trusts and manage the assets held in trust.

45. 43.. IBF a securitisation and recosnstruction company wish to raise funds by way of deposits. a.. They can approach public for the same. b.. Cannot raise funds by way of deposits c.. If need arises with the permission of RBI d.. They can raise funds by way of Deposits on Private placement basis only.

46. 44....The Securitisation or reconstruction company can acquire financial asset without execution of any deed of assignment or transfer in its favor by the concerned bank or the financial institution...Assignment is complete on the acquiring company issuing debenture or bond and incorporating therein the terms and conditions of acquisition.

47. 45.... The securitisation involves two stages. In the first stage it is acquisition of financial assets and undivided interest therein. Second stage is issue of security receipts in favor of investors for the purpose of raising money from investors

48. 46..As per the provisions of SARFAESI Act the document to be executed requires (identify which one is not correct) a.. Payment of stamp duty b.. As per the provisions of the Indian Stamp Act c.. State Stamp duty laws d.. Central Stamp duty laws

49. 47....As per RBI guidelines, a...an acquisition of funded assets should not include take over of outstanding commitments, if any, of any bank or financial institution to lend further. b…terms of acquisition of security interest in non- fund based transactions should provide for the relative commitments to continue with bank or financial institute till demand for further funding arises

50. 48..Which one is correct (Securitisation matter) a.Security receipt is in favor of investor b.Security receipt is issued with permission from Company Law Board c.Security receipt can be transferred by the secured creditor d.Security receipt is issued to the borrower who has failed to repay

51. 49..Bank D decides that the financial asset now be acquired by the securitisation company RV. Originally the Asset was given as security by QL (a partnership firm) In such an event a notice of such development to be given to a.. QL and such notice is not compulsory. b.. Such notice is not optional c.. The Obligor, which is compulsory as per the Act d.. RV

52. 50.. If the obligor is a company there is no need for modification of charge, when the notice regarding acquisition of financial asset by a securitisation company, is not given to the debtor company. However, if such notice is given to the obligor company, then notice to the Registrar of companies becomes essential.

53. 51.. Bank K had advanced to W who had defaulted leading to a securitisation company acquiring the financial asset. In fact no notice has been issued to W. Later on the debtor remits some amount towards his dues to the bank from where he had availed the financial facility. a.. K can retain the funds b.. The bank has an obligation to remit to the securitisation company c.. K first of all should not accept such payment since his contract with W is over on account of securitisation transaction. d.. The bank has to find out why the W had not paid earlier when the liability was outstanding with them.

54. 52....The securitisation or reconstruction company raises funds for acquisition of asset by issue of security receipts. Public/individual investors are barred from investing in a securitisation or reconstruction company by the Act... Realisation of the asset is held and applied towards redemption. i.e., repayment of investments as assured while issuing the security receipt.

55. 53.. In case there is no realization and repayment by the securitisation or reconstruction company, then the qualified institutional buyers are entitled to call a meeting of all qualified institutional buyers making investments in that scheme and the resolution passed in the meeting. a.. The first institutional buyer has the right to call for such meeting b.. The qualified institutional buyers holding not less than 75% of the total value of security receipts has the right c.. Any one of the Institutional investor who takes the lead gets the priority d.. None of the above

56. 54..GNP bank has got a security receipt from a securitisation company called BBG. GNP wish to transfer the security receipt. Then a.. Such security receipt need not be registered b.. Such security receipt has to be registered c.. Such security receipt cannot be transferred d.. Such security receipt has to be retained by the bank who is the original institutional investor and hence there is no question of registration / non registration.

57. 55....Asset reconstruction means acquisition of any right or interest of any bank or financial institution in any financial asset for the purpose of realisation. Powers to take measures for asset reconstruction are given without any prejudice to the provisions contained in any other law

58. 56....If the cause of default in an unit is mismanagement or lack of expertise on the part of the existing management the securitisation or reconstruction company has the powers to take over the management or change the management. This power can be exercised even when there is no default.

59. 57....The SARFAESI Act is silent about the grounds or reasons on the basis of which action of acquisition can be taken. Therefore, loan agreements between bank/financial institution and the borrower are required to be taken into account as provisions of this do not have overriding effect on existing contracts and laws.

60. 58.. When the asset is acquired for reconstruction there is limit of six years for such reconstruction. a.. Correct b.. Incorrect c.. Not 6 years but 5 years d.. It is 7 years and not 6 years

61. 59..While QRS a securitisation company is taking over the financial asset from the secured creditor AA. Then AA will receive a.. Debenture b.. Security Receipt c.. Undertaking d.. None of these

62. 60..Which one is incorrect a… At the time of enforcing securities as per the provisions of SARFAESI Act, the securitisation company may itself acquire secured assets for use or resale, if such resale is through a public auction. b.. The Securitisation company is permitted to set up trusts who can issue security receipts. c.. While issuing security receipts detailed disclosures are not required to be made by the securitisation company d.. While issuing security receipts detailed disclosures are required to be made by the reconstruction company.

63. 61....Under the SARFAESI act a secured creditor can enforce the security interest created in his favor without the INTERVENTION of the Court or Tribunal...The act deals with how the notice to be given by the secured creditor asking for repayment of the out standings.

64. 62....The secured creditor bank to give a notice asking the debtor to clear the liability in full within 60 days from the date of notice... The above is applicable to such debtors who have defaulted and classified as NPA... There is no bar for the creditor to seek the other legal remedies such as resorting to filing of suit in a competent court

65. 63..Identify which one is not incorrect. (SARFAESI Act) a.. Notice as per the provisions of the act to be given to the Creditor. b.. Notice as per the provisions of the act is a statutory notice. c.. The Act does contemplate a reply form the borrower to the notice. d.. When the offer of sale of property is accepted by the purchaser and the secured creditor accepting the offer confirms the sale, the purchaser has to deposit 50% of the offer price.

66. 64.. As per Sec 13(2) of the SARFAESI Act the first notice to be given asking for clearance of full liability within A.. 30 days B.. 60 days C.. 60 days from the date of notice D.. 60 days from the receipt of notice

67. 65.. Borrower C has been asked to repay outstanding liability of Rs.15.56 lacs (as per provisions of SARFAESI Act) by his Creditor banker DB. He has sent a reply. The bank responded to the notice and made their position clear. Based on that reply, C can file an appeal A.. in the high court B.. in the DRT C.. cannot file an appeal D.. In the appropriate court for their intervention

68. 66.. For a Public Sector bank an Authorized Officer A.. Deputy General Manager B.. At least a Chief Manager C.. Senior Branch Manager D.. Minimum AGM level

69. 67..For classification of any account as NPA it is important that the classification is done as per A.. Directives of Head Office of the Bank concerned B.. Viewpoints of R B I C.. Guidelines of the Concerned Bank’s Corporate Office D.. None of these

70. 68..An authorised officer issues the second notice as per the provisions of the act known as a.. Recalling b.. Possession c.. Take Over d.. Auction

71. 69..If the offer of sale of property is accepted by the purchaser and the secured creditor confirms then the purchaser has to deposit A.. 25% B.. 75% C.. 50% D.. No such pre condition

72. 70..Which one is correct, a.. The authorised officer has to publish possession notice in two leading newspapers. b.. Both papers should be in vernacular language c.. Before 60 days of sale of immovable property the borrower should be given notice about the sale d.. If the price of secured asset is coming less than the reserve price, the authorised officer to sell the asset at a lower price with the consent of creditor only and not that of the debtor

73. 71..The authorized officer is authorized to issue sale certificate. Such certificate is conveyance of immovable property and requires stamping as per the provisions of Stamp Act. a.. True b.. False c.. Relevant State Laws d.. Central Laws

74. 72.. As the powers of enforcing securities need to be exercised prudently, fairly and with due care and caution the Rules framed under SARFAESI Act provide that Authorized Officer should be of the level equivalent to Chief Manager of a public sector bank or equivalent or any other authorised person exercising powers of superintendence, direction and control of the business or affairs of the creditors, as the case may be

75. 73..If the price for secured asset is coming less than the reserve price, the authorized officer can sell the asset at a lower price a.. Then his decision will be final b.. With the consent of the secured creditor c.. With the consent of the borrower and the secured creditor d.. Without consulting any one

76. 74..For taking possession and then sale of immovable property, the secured creditor is required to serve a possession notice on the borrower and by affixing the possession notice on the outer door or at the conspicuous place at the property...The authorised officer is required to publish the possession notice in two leading newspapers, one of which should be in vernacular language.

77. 75..When the secured creditor is required to take possession or control of the secured asset or to sell such secured asset, he can take the help of the Chief Metropolitan Magistrate or District Magistrate...For seeking their help a request in writing is required...To approach the authority within whose jurisdiction the secured asset or documents related to it are situated.

78. 76..When the secured creditor takes over the management of business of a borrower, he may publish a notice in a newspaper published in English language and in a newspaper published in Indian language in circulation in the place where the principal office of the borrower is situated, for appointment of a.. If the borrower is a company as defined in the Companies Act, 1956 to be the directors of such company, or b.. In any other case, to be the administrator of the business of borrower.

79. 77..Any person, including borrower, aggrieved by any of the measures taken by the secured creditor or his authorised officer for taking possession of the security may make an application along with the prescribed fees to the Debt Recovery Tribunal having jurisdiction within 45 days from the date on which such measures are taken.

80. 78..The DRT has to dispose off the application preferred seeking justice, within a period of a.. 30 days b.. 45 days c.. 60 days d.. 90 days

81. 79..Against the DRT’s order, appeal can be filed to the appellate Tribunal within 30 days from the date of receipt of the order of Debt Recovery Tribunal. The Tribunal has the powers for reasons to be recorded to reduce this amount to 33.33% of the claim amount. a.. True b.. False c.. Not 33.33& but 25% d.. Not 33.33% but 50%

82. 80. Registration with Central Registry (Under SARFESI) is not required on certain things and charges. Identify the Act. A.. Merchant Shipping Act,1958 B.. Patents Act,1970 C.. Designs Act 2000 D.. None of the above

83. 81..A record to be maintained at the Head Office of the Central Registrar to record transactions relating to a.. Securitisation of financial assets b.. Reconstruction of financial assets c.. Creation of security interests d.. All the three

84. 82.. KRT a Reconstruction company failed to comply with some of the directions issued by RBI, then KRT is punishable by RBI with fine not exceeding Rupees Three lacs for the default. For further continuation of the offence an additional fine is up to Rs.2000/= per day of default can be imposed. a.. True b.. False c.. Rs.5 lacs and Rs.10000/- per day respectively d.. Rs.7 lacs and Rs 5000/- per day respectively

85. 83.. The provisions of SARFAESI Act not applicable in respect of a.. A pledge of movable within the meaning of the Indian Contract Act,1872(sec172) b.. Any right of an unpaid seller as per Sale of Goods Act,1930 (sec 47) c.. Any security interest created in an agricultural land d.. All the above

86. 84..Which one is incorrect (Provisions of SARFAESI Act not applicable ) a.. Creation of seucrity interest in any vessel as defined within the meaning of Sec 3955) of the Merchnat Shipping Act,1958. b.. Any case in which the amount due is less than twenty five percent of the principal amount and interest there under. c.. Any security interest created in an agricultural land d.. Creation of any security in any aircraft as defined in sec 2 of Aircraft Act 1934

87. 85.. CBD bank has sold the security after invoking the provisions of SARFAESI Act. After that they wish to proceed in the civil court as the liability outstanding is Rs.7.38 lacs plus accumulated interest of Rs.1.32 lacs A.. Not possible B.. Possible C.. Impossible D.. Doubtful

88. 86..Bank R has exhausted the measures of recovery through SARFAESI Act provisions. Still there is a liability of Rs.5.38 to be recovered from F. The original documents has life. a.. R can still proceed in the Civil Court by filing a suit against F. b.. R has to satisfy with whatever they could get by disposing of the security c.. Once the SARFAESI Act provisions invoked by the secured creditor and the proceedings over, automatically the creditor looses his further rights against the debtor. d.. F need not worry for the balance amount, since the security stands disposed off.

89. 87..Bank z had lent Rs.9 lacs to a borrower and obtained security in the possession of the debtor by way of hypothecation. Later on by using the provisions of the SARFAESI Act, bank could recover only Rs.6.50 lacs. The outstanding dues works out to rs.6.05 lacs. Then the bank a.. Cannot proceed against the borrower under Civil Law b.. Since the bank had availed the support of SARFAESI Act has to forego the balance outstanding c.. The bank should have applied their mind before invoking Securitisation Act d.. The bank can proceed against the borrower under Civil Law subject to the provisions of Limitation Act as well.

90. 88..Bank H has used the Securitisation Act provisions and could recover only Rs. 18 lacs. Still they will have to recover Rs.14 lacs plus interest. Fortunately for the bank the limitation period on the loan documents is intact. a.. Bank has to seek legal remedy through the Civil Court. b.. Bank has to seek legal remedy through DRT c.. Bank has to forego since they have already availed the legal avenue d.. Bank may have to approach the borrower straight away and request him to settle the balance amount.

91. 89..Secured Creditor Bank O has taken measures to invoke the provisions of SARFAESI Act. They succeeded partially recovering the debt. After completion they are left with only personal security of the borrower L. However the loan documents have become time barred. The balance outstanding being Rs.12.32 lacs + interest and other charges. a.. O will fail on legal grounds b.. O will succeed on legal grounds c.. O to file a civil suit d.. Since the outstanding is beyond Rs10 lacs O to move DRT.

92. 90.. A complaint alleging deficiency in banking service may be filed with the Banking Ombudsman having the jurisdiction a.. Issue of drafts to non customers b.. Inordinate delay in collection of cheques c.. Both a & b d.. None of the two

93. 91..No complaint to the Banking Ombudsman shall lie unless the complainant had before making a complaint to the Banking Ombudsman made a written representation to the bank and either the bank had rejected the complaint or the complainant had not received any reply within a period of one month after the bank concerned received his representation or the complainant is not satisfied with the reply given to him by the bank.

94. 92..The complaint is made not later than one year after the cause of action has arisen...The complaint is not in respect of the subject matter, which was settled through the office of the Banking Ombudsman in any previous proceedings

95. 93.. If a complaint is not settled by agreement within a period of one month from the date of receipt of the complaint or such further period as considered by Banking Ombudsman, he can pass an award... He shall be guided by the evidence placed before him, the principles of law and practice, directions, instructions and guidelines issued by RBI from time to time to pass the necessary award.

96. 94..The Banking Ombudsman while passing an Award in respect of a complaint may direct the complainant to furnish a surety for refund of amount received under the Award along with interest if any. a.. There is no such requirement b.. It is not Surety but Indemnity c.. It is not only Indemnity but also suitable Surety d.. None of the above

97. 95..A bank not agreeing to accept the Award passed under the Banking Ombudsman scheme may file a review application before the Review Authority within one month from the date of receiving copy of the Award. Bank’s application to be approved by the bank’s Chairman or in his absence by the Managing Director or any other officer of equal rank.

98. 96..The Banking Ombudsman assuming the charge of an arbitrator shall follow the procedure as laid down under the scheme read wit the provisions of a.. The Arbitration Act, 1996 b.. The Reconciliation Act 1996 c.. The Reserve Bank of India Act,1934 d.. The Arbitration and Conciliation Act 1996

99. 97.. The Banking Ombudsman from his office could be removed in the public interest by A.. Parliament B.. RBI Governor C.. Central Government D.. Finance Minister

100. 98..A Banking Ombudsman is appointed by Reserve Bank of India on the recommendations of a Selection Committee of four persons exclusive of the Governor of RBI. a.. True b.. False c.. Inclusive of the Governor of RBI four persons. d.. Governor is part of the Selection committee but other than him four persons also select a Banking Ombudsman

101. 99..The Selection Committee for selecting the Banking Ombudsman consists of a.. Three Deputy Governors of RBI b.. Three Executive Directors of RBI c.. Additional Secretary, Finance, Department of Economic Affairs as a Special invitee d.. A & C only

102. 100. For a Debt Recovery Tribunal, the Presiding Officer holds office for a term of 5 years from the date on which he enters upon his office or until he attains the age of 62 years, which ever is less. a.. Correct b.. In correct c.. Not 5 years and 62 years but 3 years and 65 years respectively d.. Not 5 years but 7 years whereas 62 years of age is correct.

103. 101..As per the observation of the High Court, the DRT has power to entertain the application for execution of the decree of foreign court... Every application to be filed before the DRT shall be accompanied by appropriate fees... The Tribunal may, on giving opportunity to both the sides of being heard, pass interim or final order for payment of amount including interest thereon.

104. 102..A Civil suit which is pending stands transferred to the DRT. Then the fees payable a.. Will be decided by the DRT b.. Standard fees to be paid as applicable to a new case referred to the DRT c.. No fees required to be paid d.. None of the above

105. 103.. Presiding Officer of DRT is a.. Appointed by the Committee of Bankers b.. Appointed by the RBI c.. Appointed by the RBI in consultation with Central Government d.. None of the above.

106. 104.. Appeal before the Appellate Tribunal to be disposed off finally from the date of receipt of appeal within A.. 3 months B.. 6 months C.. 180 days D.. None of these

107. 105.. The Correction any clerical or arithmetical mistake in Recovery Certificate has to be done by (Certificate issued by the Presiding Officer) A.. Concerned Clerk himself B.. The Presiding Officer of the Tribunal C.. The Recovery Officer D.. Any one of them

108. 106..The Recovery officer while carrying out his job, a third party is affected. Then he can file an appeal A.. Within 30 days B.. To the Tribunal C.. Both A& B are correct D.. Both A & B are wrong

109. 107...Who is not the public servant as per the Sect 21 of the Indian Penal Code. A.. The Chairperson of an Appellate Tribunal B.. A Director of a Public Limited Company C.. The Recovery Officer D.. The Presiding Officer of a tribunal

110. 108.... The DRT issues Recovery Certificate to the applicant. Recovery Officer has to proceed to recover the amount specified in the Recovery Certificate, by adopting a.. Attachment and sale of movable and immovable property of the defendants b. Arrest of the defendant and his detention in prison c.. Appointment of a receiver for the management of the movable and immovable properties of the defendant. d.. Any one of the above.

111. 109..Any person aggrieved by the order passed by the Tribunal or deemed to have been passed by the Tribunal under DRT Act, may prefer an appeal to the concerned Appellate Tribunal. a.. Within 45 days form the date on which copy of the order is received. b.. If the order was made by the Tribunal with the consent of the parties no appeal possible c.. Both a & b d.. Within 60 days from the date on which copy of the order is received.

112. 110.. Bank V has moved the DRT for justice. Before the final order is passed Bank C who have also advanced to the same borrower has approached the DRT for inclusion in the same proceedings. a.. Permissible b.. Not permissible c.. Not permissible since both the contracts are different d.. DRT would not entertain and advise the bank to file a separate case.

113. 111..Identify which one is incorrect (DRT matters) a.. Recovery officer can ask the defendant to furnish by affidavit particulars of his assets. b.. The defendant can raise a plea before the Recovery Officer about correctness of the amount ordered to be paid. c.. A counterclaim filed before DRT has the same effect as a plaint in cross-suit. d.. For the matters for which the Tribunals are empowered the Civil Courts have no jurisdiction.

114. 112..Under the Bankers Book Evidence Act, the term Judge refers to a.. Judge of a special Court b.. Judge of a High Court c.. Judge of a DRT d.. Judge of Civil Court

115. 113..The Bankers’ Book Evidence Act extends to whole of India except the Sate of Jammu & Kashmir,...Bankers’ books’ include ledgers, daybooks, cashbooks, account books and all other records used in the ordinary course of business of a bank.

116. 114..A certified copy of any entry in a Bankers’ Book is received in legal proceedings as conclusive evidence for existence of such entry. a.. Correct b.. In correct c.. It is not Conclusive but prima facie evidence d.. Support

117. 115.. For making the order that bank officer should either produce the books of account or appear as witness (as per the Bankers Book Evidence act) can be made by the Court or Judge with out summoning the bank. Such order shall be served on the bank at least 5 days before the same is to be obeyed. a.. True b.. False c.. Not 5 days but 3 days d.. At least 3 clear working days

118. 116..Consumer Protection Council( identify the incorrect one) A.. The Collector of the District to be the Chairman of the District Council B.. State Consumer Protection Council to meet at least 3 meetings every year.. C.. For Central Consumer Protection Council the Chairman will be the Minister in charge of the consumer affairs in the Central Government. D.. The highest council is the Central Council who has the jurisdiction for the entire country.

119. 117..For filing any complaint before a District Forum, State Commission or the National Commission the limitation period is from the date of cause of action. A.. 1 year B.. 2 years C.. 3 years D.. None of the above

120. 118.. If the compensation claimed is above Rs.20 lacs but does not exceed Rs1 Crore then the appeals against the orders of any District Forum to be preferred before A.. The High Court B.. The State Commission C.. The Central Council D.. The National Council

121. 119....The Consumer Protection Act is not applicable in the State of Jammu and Kashmir...The Act is for better protection of the interests of the consumers and for that purpose to make provision for the establishment of consumer councils and other authorities for the settlement of consumers’ dispute...The Act is social welfare benefit oriented legislation for the consumer providing self-contained quasi-judicial machinery to provide speedy and simple redressal to consumer disputes.

122. 120..A dispute where the person against whom complaint has been made, denies or disputes the allegations contained in the complaint. a.. Complaint b.. Consumer Dispute c.. Dispute d.. Allegation

123. 121....District Consumer Protection Council to meet as an when necessary. There has to be at least two meetings every year. a.. Correct b.. Incorrect c.. At least One meeting d.. At least Three meetings

124. 122…..Which one is not correct (Consumer Protection matters). a.Once the complaint is admitted by the District Forum it cannot be transferred to any other Court or Tribunal or any authority set up under any law. b.Any person aggrieved by the order passed by the District Forum may prefer an appeal to the State Commission within a period of 30 days from the date of the order. c.A person who is a Judge of the Supreme Court, to be nominated by the Law Ministry, who shall be the Chairman of Selection Committee to the National Commission d.For filing any complaint before a District Forums, State Commission or the National Commission the limitation period is 2 years from the date of cause of action.

125. 123.. Debtor K has executed a Demand Promissory Note and a Hypothecation agreement to Bank CBM. Then the bank has made available the finance. a.. Valid contract b.. Invalid contract c.. Quasi contract d.. No contract

126. 124..Borrower O had executed a demand promissory note on 12.03.2006. Identify the correct limitation date. a.. 12.03.09 b.. 11.03.09 c.. 13.03.09 d.. None of the above

127. 125..H & J have taken a loan from bank K, by executing a demand promissory note and other documents jointly. a.. H is the promisor b.. J is the promisee c.. K the promisor d.. K is the promisee and both H & J promisors

128. 126.. D had executed an acknowledgment of debt on 22.07.07 for the Demand Promissory Note executed on 27.07.05.Find out the exact limitation date. a.. 27.07.08 b.. 22.07.10 c.. 27.07.10 d.. 22.07.08

129. 127... Identify which is not a valid contract. a.. Proposal and acceptance b.. Consideration c.. Free consent d.. Agreement under force

130. 128..The bailee is responsible in case there is a loss to the goods bailed. A.. Yes B.. If he is not taking adequate care C.. It is bailor and not bailee responsible D.. False

131. 129..Under Pledge, the possession is with the A.. Borrower B.. Creditor C.. Owner D.. Surety

132. 130..Consideration not required for A.. An agency B.. Safe Custody Article C.. Mortgage D.. Safe Deposit locker

133. 131..The right of re-sale is available to A.. An unpaid seller B.. The user C.. The Debtor D.. All

134. 132.. To receive rents and profits arising from the property A.. Simple Mortgage B.. Usufructuary Mortgage C.. English Mortgage D.. Mortgage By way of Conditional Sale

135. 133...Bank Z has lent money to R on the personal guarantee of L. The bank obtained a demand promissory note from R and a guarantee agreement from both L & R. Among other contents, the guarantee agreement protected the bank with special clauses for which Guarantor L has given his consent. When R failed to repay, Z asked L to repay the loan. He promptly refused and advised the bank to approach R who only has taken the money. After trying only they can approach him and not before that, that is what L told the bank. a.. The stand of L is incorrect b.. The stand of Z is incorrect c.. What L says has relevant substance d.. Z will succeed if they proceed against L even without proceeding against R based on the guarantee agreement

136. 134....Where there are co-sureties, a release by the creditor of one of them does not discharge the others. Also, the surety released does not become free from his responsibility to the other sureties...A surety has the right of Subrogation...Any guarantee obtained by means of misrepresentation made by the creditor is invalid...Any guarantee which the creditor has obtained by means of keeping silence as to material circumstance is also invalid.

137. 135..A has been appointed as his agent by D. In turn A has appointed L (another person) to look after the affairs of D for whom A has been appointed. Then L is a.. Not a Principal b.. Sub Agent c.. Substituted Agent d.. Manager

138. 136.... No consideration is necessary to create an agency... In an emergency, an agent has authority to do all acts to protect his principal form loss as would be done by a person in his own case... An agent can detain money received by him on account of goods sold, even if all the goods consigned to him for sale are not sold.

139. 137.. A bank as a collecting banker has misplaced the cheque accepted for collection. The customer when he approached to know about the realisation of the cheque, then only the bank could realise it has misplaced the Cheque. a.. The bank is responsible b.. Till the cheque is realized or returned, the bank is not responsible. c.. If the cheque had been purchased then the bank would have been responsible and not for collection item. d.. The bank is not responsible

140. 138....Whether a stipulation in a contract of sale is condition or warranty depends on the types of contract. Even if the parties have agreed that a stipulation is a warranty, in fact, it may be a condition if it is the basis of the contract... If the sale of goods is by description, there is an implied condition that the goods shall correspond with the description.

141. 139... A B C & co a partnership firm has a current account with bank J. The account is operated by any one of the partners. A cheque (open cheque) received signed by one of the partners B, representing the firm and in favour of B. Another cheque signed by C representing the firm favouring Self. a.. The bank is in order in paying both the cheques b.. The bank is not in order in paying both the cheques c.. The bank is in order in paying the cheque signed by B and not by C d.. The bank is in order in paying the cheque signed by C and not by B

142. 140... Bank F has got the documents executed by a Limited Company. However they have overlooked to get the Common Seal affixed on these documents. A reference to the Articles of Association has revealed that affixing the Common Seal for the documents has not been mentioned. In other words, the Articles of Association is silent with regard to the same. a.Bank will get protection b.Bank cannot recover the dues based on the documents c.Affixing of Common Seal is compulsory in such cases. d.Affixing of Common Seal is not compulsory unless it is specifically stated in the Articles of Association

143. 141....When a company exercise its powers to promote and/or realise any of its objects stated in the Memorandum of Association, it is known as Intra vires ( i.e., within the powers of ) the company... Any other act of the company which is outside the scope of the objects clause of the Memorandum of Association is called Ultra vires(i.e., beyond the powers of ) the company

144. 142.... Doctrine of Constructive notice states that every outsider is assumed to have read the Memorandum of Association and Articles of Association. …Doctrine of Indoor Management lays down that the outsiders are not required to see the compliance of internal regulations of the company.

145. 143..The provisions of FEMA extend to all over India and also apply to all branches, offices and agencies outside India owned or controlled by a person resident in India and also to any contravention committed outside India by any such person to whom this Act applies.

146. 144..(1)The mortgagor apparently sells the mortgaged property to the mortgagee (2) The mortgagor delivers possession of the mortgaged property to the mortgagee a.. Simple & Equitable b...Conditional Sale & Usufructuary c.. Simple & Usufructuary d.. English & Conditional Sale

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