MCQs & Integrated Case Studies on Corporate & Economic Laws are prepared exclusively for the Final Level of Chartered Accountancy Examination requirement. It covers the entire revised, new syllabus as per ICAI. The Present Publication is the 6th Edition & Updated till 30th April 2021 for CA-Final | New Syllabus, with the following noteworthy features: • Strictly as per the New Syllabus of ICAI • [Knowledge Based & Application Based MCQs] as per the pattern applicable for the exams • Includes the following types of MCQs in a Separate Section in Each Chapter: ◦ RTPs & MTPs ◦ Past Exam Questions • [Most Updated & Amended] This book is updated & amended as per the following: ◦ Companies (Amendment) Act, 2020 ◦ Companies (Appointment and Qualifications of Directors) 5th Amendment Rules, 2020 ◦ Schedule V of the Companies Act, 2013 ◦ Master Directions – External Commercial Borrowings (Updated as of 12th April 2021) ◦ Foreign Exchange Management (Export of Goods and Services) (Amendment) Regulations, 2021 ◦ Foreign Contribution (Regulation) Amendment Act, 2020 ◦ Arbitration and Conciliation (Amendment) Act, 2021 ◦ Insolvency and Bankruptcy (Amendment) Ordinance, 2021 Also Available: • [7th Edition] of Taxmann’s Corporate & Economic Laws (New Syllabus) • [7th Edition] of Taxmann’s CRACKER cum Exam Guide on Corporate & Economic Laws (New Syllabus) • Taxmann’s Combo for Textbook + Cracker + MCQs & Integrated Case Studies + Class Notes Contents of this book are as follows: • Appointment and Qualifications of Directors • Meeting of the Board and its Powers • Appointment and Remuneration of Managerial Personnel • Inspection, Inquiry and Investigation • Compromises, Arrangements and Amalgamations • Prevention of Oppression & Mismanagement • Winding Up • Companies Incorporated Outside India • Miscellaneous Provisions • Adjudication and Special Courts • NCLT and NLCAT • Corporate Secretarial Practice • Securities Contracts (Regulation) Act, 1956 and SCR Rules, 1957 | Deleted from Syllabus • Securities and Exchange Board of India Act, 1992 & SEBI (LODR) Regulations, 2015 • Foreign Exchange Management Act, 1999 • Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFESI Act, 2002) | Deleted from Syllabus • Prevention of Money Laundering Act, 2002 • Foreign Contribution (Regulation) Act, 2010 • Arbitration and Conciliation Act, 1996 • Insolvency and Bankruptcy Code, 2016 • Integrated Case Studies

1. 6(b) Practical Illustration on Sec. 151 and Rule 7 Refer Q. No. 30 4
Jan. 21* 6(a) Practical Illustration on Sec. 167 Refer Q. No. 88 4
*From May 19 Exam, marks are covered only for descriptive part of the paper as MCQ paper was not issued in public
domain by ICAI.
1.1

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18. SAMPLE CHAPTER
21.1
Integrated Case Studies
Integrated Case Study 1
Lagus Transport Services Limited (LTSL) is operating in logistics and public transport domain. The
company has pan-India presence. As per its Articles of Association, the company can appoint a maximum of
15 directors and all of them shall be rotational directors. Presently, the company has a strength of 14
directors, of which 9 are executive directors and the remaining 5 are non-executive directors. As on 31st
March, 2019, its paid-up share capital was ₹8.42 crore; the turnover was ₹84 crore; and it had, in the
aggregate, outstanding loans, debentures and deposits to the tune of ₹42 crore.
In the Annual General Meeting (AGM), held on 20th August, 2019, Anil, Badal, Chanchal and Damodar were
appointed as directors in place of Mohan, Navin, Om and Prasad by passing a single resolution with simple
majority. It is to be noted that earlier, a motion authorising the appointment of Anil, Badal, Chanchal and
Damodar by a single resolution was passed in the meeting and not a single vote was cast against such
motion.
As on 31st March, 2020, the turnover of the company increased to ₹120.52 crore but the aggregate of
outstanding loans, debentures and deposits reduced to ₹40 crore. The paid-up share capital was the same
as earlier. Due to the increased turnover there arose the requirement of appointing two independent
directors.
Since the company was required to appoint two independent directors, the total strength of the Board with
such appointments would go up to 16 directors from the present 14 whereas according to the Articles, the
company can have a maximum of 15 directors. Accordingly, the Articles were altered and the total strength
was increased to 20 directors.
After altering the Articles, the company proceeded to appoint four independent directors instead of the
mandatorily required two, since it was felt that such step would strengthen the corporate governance to
the maximum extent. The independent directors were - Mrs. Eekam, who is considered ‘influencer’ on
supply chain management and has a lot of expertise in the logistics field; Mrs. Prajna who is a marketing
expert; Mrs. Ruchita, who is MBA (Finance and Accounting) from IIM, Ahmedabad; and Mr. Amit, who is
skilled in developing customised software. Subsequent to the above developments, the time to hold Annual
General Meeting (AGM) approached and it was held on 12th August, 2020, at the registered office of the
company at Mumbai.
Q.1 In this case scenario, Anil, Badal, Chanchal and Damodar were appointed as directors by passing a
single resolution at the AGM. Is such appointment valid?
(a) The appointment of Anil, Badal, Chanchal and Damodar by a single resolution is valid because
beforehand, a motion authorising their appointment by a single resolution was passed in the meeting
and not a single vote was cast against such motion.
(b) The appointment of Anil, Badal, Chanchal and Damodar by a single resolution is not valid because
passing of resolution by simple majority indicates that it was not passed unanimously.
21

19. Integrated Case Studies Chapter 21
21.2
(c) The appointment of Anil, Badal, Chanchal and Damodar by a single resolution with simple majority is
not valid because such resolution is required to be passed as a special resolution.
(d) The appointment of Anil, Badal, Chanchal and Damodar by a single resolution is not valid because in no
case more than one director can be appointed by passing a single resolution.
Q.2 In the given case scenario, according to the Articles all the directors are rotational. Had this been not
the case, how many directors were required to retire at the AGM which was held on 20th August,
2020?
(a) Five directors
(b) Four directors
(c) Three directors
(d) Two directors
Q.3 In the given case scenario, if it is presumed that as on 31st March, 2020, the turnover of the company
is ₹87.00 crore and the paid-up share capital is ₹12.00 crore, would the company be still mandatorily
required to appoint two independent directors?
(a) There is no need to appoint two independent directors since the aggregate of turnover and paid-up
share capital has not crossed the threshold of ₹100 crore.
(b) Instead of appointing two independent directors, the company is required to appoint only one
independent director since the aggregate of turnover and paid-up share capital is above ₹90 crore but
less than ₹100 crore.
(c) The company is required to appoint minimum two independent directors since the paid-up share
capital is ₹12 crore.
(d) The company is required to appoint only one independent director since the paid-up share capital is
below ₹15 crore.
Q.4 According to the case scenario, the company altered its Articles of Association so as to increase the
total strength of directors up to 20 from the present 15 directors. Which of the following options is
applicable in such a case of alteration:
(a) The articles were altered by passing an ordinary resolution.
(b) The articles were altered by passing an ordinary resolution followed by approval sought from the
jurisdictional Registrar of Companies.
(c) The articles were altered by passing a Board Resolution with more than 75% majority.
(d) The articles were altered by passing a special resolution.
Q.5 As on 12th August, 2020, when the AGM of LTSL was held, the total strength of directors reached to
18 due to the appointment of four independent directors. When all the directors are rotational, how
many directors shall get retired at this AGM?
(a) Six directors
(b) Five directors
(c) Four directors
(d) Two directors

20. Chapter 21 Integrated Case Studies
21.3
Answer – Integrated Case Study 1
Q. No. Answer Reason
Q.1 (a) Refer Sec. 162(1) - At a general meeting of a company, a motion for the appointment of 2 or
more persons as directors of the company by a single resolution shall not be moved unless a
proposal to move such a motion has first been agreed to at the meeting without any vote
being cast against it.
Q.2 (c) Refer Sec. 152(6)(a) - Unless the articles provide for the retirement of all directors at every
AGM, not less than 2/3rd of the total number of directors of a public company shall—
(i) be persons whose period of office is liable to determination by retirement of directors by
rotation; and (ii) save as otherwise expressly provided in this Act, be appointed by the
company in general meeting.
Sec. 152(6)(c) - At the first AGM of a public company held next after the date of the general
meeting at which the first directors are appointed in accordance with clauses (a) and (b) and
at every subsequent AGM, 1/3rd of such of the directors for the time being as are liable to
retire by rotation, or if their number is neither 3 nor a multiple of 3, then, the number
nearest to 1/3rd, shall retire from office.
Hence, directors to be liable to retire by rotation = 1/3rd of 10,
= 3.33 or nearest 3
Rotational Directors = 2/3rd of 14 = 9.33, i.e. 10
Q.3 (c) Refer Rule 4 of Companies (Appointment and Qualification of Directors) Rules, 2014.
The following class or classes of companies shall have at least 2 directors as independent
directors:
(i) the Public Companies having paid up share capital of ₹10 crore or more; or
(ii) the Public Companies having turnover of ₹100 crore or more; or
(iii) the Public Companies which have, in aggregate, outstanding loans, debentures and
deposits, exceeding ₹50 crore.
The paid-up share capital or turnover or outstanding loans, debentures and deposits, as the
case may be, as existing on the last date of latest audited F.S. shall be taken into account.
Q.4 (d) Refer Sec. 14(1) - Subject to the provisions of this Act and the conditions contained in its
memorandum, if any, a company may, by a special resolution, alter its articles.
Refer 2nd Proviso to Sec. 149(1) - A company may appoint more than 15 directors after
passing a special resolution.
Q.5 (b) Refer Sec. 152(6)(c) – Explained in Q. 2.
For the purposes of Sec. 152(6), “total number of directors” shall not include independent
directors.
Hence directors to retire at AGM will be 1/3rd of (18-4), i.e. 4.67 or nearest, i.e. 5

21. Integrated Case Studies Chapter 21
21.4
Integrated Case Study - 2
Ali Baba Limited is a listed company incorporated under the provisions of Company Law having its
registered office at Andhra Pradesh. Mrs. Smart is a Managing Director of Ali Baba Limited since its
incorporation. She was first director and one of the promoters of the company. She has vast experience of
managing the company in very efficient manner.
Ali Baba Ltd. is a holding company of PM Limited with a Fira Private Limited as a subsidiary to PM Limited.
Following are the details pertaining to the incorporation of the related entities and its capital structure:
S. No. Particulars Ali Baba Limited PM Limited Fira Private Limited
1. Date of Incorporation 17/09/1985 06/09/1988 28/09/1989
2. Place of Registered Office Andhra Pradesh Delhi Hyderabad
3. Authorised Share Capital ₹100,00,00,000/- ₹20,00,00,000/- ₹10,00, 00,000/-
4. Paid Up Share Capital ₹99,00,00,000/- ₹10,00,00,000/- ₹10,00,00,000/-
Under the guidance of Mrs. Smart, Ali Baba Limited acquired shareholding in PM Limited and thus resulting
it into a subsidiary company of Ali Baba Limited. Now the Board of Directors of Ali Baba Limited wishes to
nominate Mrs. Smart for the position of Managing Director in PM Limited and also to appoint her as Whole
Time Director (WTO) in Fira Private Limited, which is a wholly owned subsidiary (WOS) of PM Limited.
Therefore, the Board of Directors of PM Limited passed a Board Resolution through resolution by
circulation to appoint Mrs. Smart as Managing Director of the company. Subsequently, the Board of
Directors of Fira Private Limited passed the Board Resolution at Board Meeting, wherein all directors
present in the meeting approved the resolution for appointing her as Whole Time Director of the company
and then subsequent to unanimous Board approval, Fira Private Limited also conducted the general
meeting for getting approval of shareholders and passed the ordinary resolution to appoint her as Whole
Time Director in the company.
Further, for appointment of Mrs. Smart, PM Limited and Fira Private Limited had complied with Schedule V
of the Companies Act, 2013 as a result respective companies did not take any approval from Central
Government for her appointment as Managing Director and Whole Time Director respectively.
Based on the above provided information and in the light of applicable provisions of the Companies Act,
2013, read with Schedule V of the Act, you are asked to advice on the following Multiple Choice Questions:
Q.1 State on the validity of the appointment of Mrs. Smart as Managing Director in PM Limited in terms
of the provisions of the Companies Act, 2013?
(a) Invalid, as no such appointment was made or approved by resolution passed at the board meeting
with the consent of all the directors present at the meeting and supported by general meeting’s
ordinary resolution under section 196.
(b) Valid as whole time KMP shall hold office in its subsidiary at the same time.
(c) Valid with further approval of the Central Government
(d) Invalid because a person cannot hold more than one office as Managing Director

22. Chapter 21 Integrated Case Studies
21.5
Q.2 Whether Mrs. Smart appointment as Whole Time Director in Fira Private Limited is valid as per
provisions of the Companies Act, 2013?
(a) No, because being Fira Private Limited is private company, so rules 8 8A of Companies
(Appointment Remuneration of Managerial Personnel) Rules, 2014, not applicable
(b) Yes, as per section 2(71) it is deemed as public Co.
(c) Yes, on further approval of Central Government
(d) No, because of restriction under section 203(3) on appointment in more than one company.
Q.3 What will be legal position as to the appointment of Mrs. Smart as Managing Director in PM Limited,
if Ali Baba Limited is a Government Company?
(a) Invalid due to non-compliance of section 203
(b) Valid in light of the provisions of section 203(4A)
(c) Valid with approval of central government
(d) Invalid because a person cannot hold office of Managing Director in more than 1 company.
Q.4 What is the status of Fira Private Limited for the purpose of the applicability of the Companies Act,
2013, if Ali Baba Limited is a Government Company?
(a) Private Company
(b) Public Company
(c) Government Company
(d) Associate Company
Q.5 Whether appointment of Mrs. Smart as Whole Time Director in Fira Private Limited is legally
acceptable, if Ali Baba Limited is a Government Company?
(a) No, because being Fira Private Limited is private company, so rules 8 8A of Companies
(Appointment Remuneration of Managerial Personnel) Rules, 2014, not applicable
(b) Yes, because section 203 is not applicable on Government Companies
(c) Yes, with further approval Central Government
(d) No, because of restriction under section 203(3)

23. Integrated Case Studies Chapter 21
21.6
Answer – Integrated Case Study 2
Q. No. Answer Reason
Q.1 (a) Refer Sec. 196(4) - Subject to the provisions of Sec. 197 and Schedule V, a managing
director, whole-time director or manager shall be appointed and the terms and conditions of
such appointment and remuneration payable be approved by the Board of Directors at a
meeting which shall be subject to approval by a resolution at the next general meeting of the
company and by the Central Government in case such appointment is at variance to the
conditions Specified in Part I of that Schedule.
Q.2 (b) Refer Sec. 196(4).
Sec. 196 shall not apply to private companies.
As per proviso to Sec. 2(71) - a company which is a subsidiary of a company, not being a
private company, shall be deemed to be public company for the purposes of this Act even
where such subsidiary company continues to be a private company in its articles.
Q.3 (b) Refer Sec. 203(4A) - The provisions of Sec. 203(1) to 203(4) shall not apply to a managing
director or Chief Executive Officer or manager and in their absence, a whole-time director of
the Government Company.
Q.4 (c) Refer Sec. 2(45) - Government company means any company in which not less than 51% of
the paid-up share capital is held by the C.G., or by any S.G.(s), or partly by the Central
Government and partly by one or more State Governments, and includes a company which is
a subsidiary company of such a Government company;
Q.5 (b) Refer Secs. 2(45) and 203(4A)

24. Chapter 21 Integrated Case Studies
21.7
Integrated Case Study - 3
A Corporate Insolvency Resolution process, under the Insolvency and Bankruptcy Code 2016 was initiated
by M/s A Limited as a Corporate Debtor. The company was in default to its creditors and the assets were
insufficient to meet the liabilities of the company.
Attempts to resolve the insolvency of the corporate debtors failed and in the last, it was decided to go for
liquidation of the company. The balance sheet and additional information of A Ltd. are given below:
Key Financial information:
Data Amount
(₹ in Crore)
Data Amount
(₹ in Crore)
Equity Share Capital 11,000 Land and building 16,500
Preference Share Capital 3,800 Fixtures and Fittings 1,000
Term Loan 1,500 Stocks 640
Working Capital Loan 1,200 Debtors 550
Unsecured financial Creditors 1,000 Other Current Assets 550
Government Dues 400 Cash 175
Workman Dues 240 Accumulated Losses 2,350
Employee Liability 300
Operational Creditors 2,400
21,840 21,840
Additional Information:
Creditors
(1) Term loan is secured against fixed charge on land building and fixtures fittings. Bank A with an
₹800 crore term loan outstanding has first charge on the assets and Bank B with ₹700 crore
outstanding has second charge on the assets.
(2) Working capital loan is provided by Bank C and secured against a floating charge on debtors stock of
the company.
Unsecured financial creditors include a Director X who owns 3% of the share capital of M/s A Limited with
an outstanding loan due to him of ₹50 crores.
Q.1 What would have been the constitution of Committee of Creditors.
(a) Bank A, Bank B, Bank C and all unsecured financial creditors.
(b) Bank A, Bank B, Bank C and unsecured unrelated financial creditors.
(c) Bank A, Bank B and Bank C, unsecured financial creditors and operational creditors.
(d) Bank A, Bank B, Bank C, unsecured unrelated financial creditors and operational creditors.

25. Integrated Case Studies Chapter 21
21.8
Q.2 Voting Rights of the members (Operational creditors) in the committee of creditors will be
__________________:
(a) 39.34%
(b) 39.66%
(c) 10.99%
(d) None of the above
Q.3 Voting Rights of the members (unsecured unrelated financial creditors) in the committee of
creditors will be __________________:
(a) 25.68%
(b) 26.02%
(c) 15.57%
(d) None of the above
Q.4 The application before NCLT was filed on 5th January, 2019. The case was admitted on 20th January
2019. The IRP who was appointed on 20th January, 2019 received the order on same date seeks your
guidance on the time period as to making of public announcement. Select the appropriate answer:
(a) Interim resolution professional shall make the public announcement within 3 days from the date of
appointment.
(b) Interim resolution professional shall make the public announcement within 5 days from the date of
appointment.
(c) Interim resolution professional shall make the public announcement within 7 days from the date of
appointment
(d) Interim resolution professional shall make the public announcement within 14 days from the date of
appointment.
Q.5 Order of Priority in which claims will be settled among various claimant will be:
(a) (1) Cost of Liquidation; (2) Workmen dues for 24 months; (3) Secured creditors; (4) Government dues.
(b) (1) Cost of Liquidation; (2) Workmen dues for 12 months; (3) Government Dues; (4) Secured
Creditors.
(c) (1) Cost of Liquidation; (2) Workmen dues for 24 months; (3) Government Dues; (4) Secured
Creditors.
(d) (1) Cost of Liquidation; (2) Workmen dues for 12 months; (3) Secured creditors, (4) Government dues.

26. Chapter 21 Integrated Case Studies
21.9
Answer – Integrated Case Study 3
Q. No. Answer Reason
Q.1 (b) Refer Sec. 21 of IBC, 2016.
The CoC shall comprise all financial creditors of the corporate debtor. A financial creditor or
the authorised representative of the financial creditor, if it is a related party of the corporate
debtor, shall not have any right of representation, participation or voting in a meeting of the
CoC.
Q.2 (d) Refer Sec. 21 of IBC, 2016 and Regulation 16 of IBBI (Insolvency Process for Corporate
Persons) Regulations, 2016.
CoC shall comprise all financial creditors. Operational creditors are not the members of CoC,
hence no voting right.
Q.3 (b) Refer Sec. 21 of IBC, 2016 and Regulation 16 of IBBI (Insolvency Process for Corporate
Persons) Regulations, 2016.
A member of the committee formed under this Regulation shall have voting rights in
proportion of the debt due to such creditor or debt represented by such representative, as the
case may be, to the total debt.
Voting right of the unsecured unrelated financial creditors will be
= 950 Crores / 3650 Crores
= 26.02%
Loan amount of unsecured unrelated financial creditors = 950 Crores.
Total Loan amount of members of CoC = 3650 Crores
(800 Crores + 700 Crores + 1200 Crores + 950 Crores)
Q.4 (a) Refer regulation 6 of IBBI (Insolvency Process for Corporate Persons) Regulations,
2016.
Interim Resolution Professional shall make the Public Announcement immediately after his
appointment.
“Immediately” refers to not more than 3 days from the date of appointment of the Interim
Resolution Professional.
Q.5 (a) Refer Sec. 53 of IBC, 2016.
As per provisions of Sec. 53 of the IBC, 2016, the proceeds from the sale of the liquidation
assets shall be distributed in the following order of priority:
1. the insolvency resolution process costs and the liquidation costs;
2. the following debts ranked equally between and among the following:
workmen's dues for the period of 24 months preceding the liquidation
commencement date; and
debts owed to a secured creditor in the event such secured creditor has relinquished
security in the manner set out in Sec. 52.
3. wages and any unpaid dues owed to employees other than workmen for the period of 12
months preceding the liquidation commencement date;
4. financial debts owed to unsecured creditors;

27. Integrated Case Studies Chapter 21
21.10
5. the following dues shall rank equally between and among the following
any amount due to the C.G. and the S.G. including the amount to be received on
account of the Consolidated Fund of India and the Consolidated Fund of a State, if any,
in respect of the whole or any part of the period of 2 years preceding the liquidation
commencement date;
debts owed to a secured creditor for any amount unpaid following the enforcement of
security interest.
6. any remaining debts and dues;
7. preference shareholders, if any; and
8. equity shareholders or partners, as the case may be.

28. Chapter 21 Integrated Case Studies
21.11
Integrated Case Study - 4
ABC (P) Ltd., a construction company launched its project in Greater Noida in 2015 whose completion date
was given as June, 2018. This project involved construction of residential units and office spaces. The
modus operandi was to invest around ₹1200 crore for developing the township under ‘committed returns
plan’. The ‘committed returns plan’ required the buyers to pay 80% of the sale consideration up-front at
the time of execution of the MOU and the promoters of ABC (P) Ltd. would undertake to pay 12% of the
‘advance money’ so received each month to the investors as ‘committed returns’ from the date of execution
of the MOU till the time actual physical possession of residential units/office space.
Armaan, an Architect by profession, was also interested in this plan and applied for a residential unit as
well as an office space. Under the ‘committed returns plan’, Armaan was required to make a payment of
₹4.80 Crores (i.e. 80% of the cost of ₹6.00 crore for a 4BHK apartment and an office space). According to the
MOU entered by Armaan with the company, he would be paid ₹4,80,000 per month through NEFT from
October, 2016 onwards till the handing over of the fully constructed property. The difference of ₹20.00 lacs
would be paid by Armaan when he will be having the possession of the apartment as well as office space.
Everything seemed to be fine in the first year as the company paid the ‘committed returns’ to the buyers
without any default but stopped the same thereafter without assigning any reason. Armaan got extremely
worried at the changed scenario. He contacted the officials of the company but received no reply. At a later
date, he was informed that the possession would be given within the next 2 years; but the time passed
without anything concrete to happen. Armaan discussed this matter with his friend, who informed him that
due to significant amendments in Insolvency and Bankruptcy Code, 2016 (IBC, 2016) home-buyers were
also the financial creditors of the builders and could initiate insolvency proceedings against the company.
He further clarified that ‘debt’ in this case was disbursed against the consideration for ‘time value of
money’ which is the main ingredient that is required to be satisfied in order for an arrangement to qualify
as financial debt and for the lender to qualify as a financial creditor under the scheme of IBC.
In the meantime, Armaan came across a public announcement through which claims from ‘Financial
Creditors’ as well as other creditors of ABC (P) Ltd. were invited. On further enquiry, he gathered that the
company had defaulted in repayment of a term loan of ₹100 crore which was obtained from National Bank
of India. Accordingly, the Hon’ble National Company Law Tribunal (NCLT), Delhi, on the application of
National Bank of India, had ordered the commencement of Corporate Insolvency Resolution Process (CIRP)
against the company. As mentioned in the public announcement, Armaan submitted his claim along with
proof thereof in ‘Form C’ through the specified e-mail.
Q.1 In the given case study, National Bank of India filed an application for corporate insolvency
resolution process (CIRP) with National Company Law Tribunal, Delhi against ABC (P) Ltd. for
default in repayment of term loan. If everything was in perfect order, from which date the corporate
insolvency resolution process would have commenced?
(a) From the date of submission of the application.
(b) From the date of admission of the application.

29. Integrated Case Studies Chapter 21
21.12
(c) From the date of ascertaining the existence of default by the NCLT.
(d) From the date of appointment of Insolvency Resolution Professional (IRP).
Q.2 Suppose Radhika, one of the directors of the company and relative of Mr. Rounak, promoter of the
company, had given a loan of ₹15,00,000 to ABC (P) Ltd. which remained outstanding when
Corporate Insolvency Resolution Process was ordered. As financial creditor whether she could be a
part of Committee of Creditors (CoC) after she submitted her claim in ‘Form C’.
(a) Yes, she could be a part of Committee of Creditors (CoC) as she had given loan to ABC (P) Ltd. which
was more than ₹5,00,000.
(b) No, she being a director of ABC (P) Ltd., could not be a part of Committee of Creditors (CoC).
(c) Yes, she could be a part of Committee of Creditors (CoC), if Interim Resolution Professional (IRP)
permitted her despite the fact that she was a director of ABC (P) Ltd.
(d) Yes, she could be a part of Committee of Creditors (CoC), if Interim Resolution Professional (IRP)
sought permission of minimum 75% of the shareholders of the company carrying voting rights.
Q.3 Suppose the application for Corporate Insolvency Resolution Process against ABC (P) Ltd. filed by
National Bank of India with the National Company Law Tribunal, Delhi is adjudged as incomplete in
respect of certain matters. It was intimated to National Bank of India through notice issued on 24th
October 2019. The said notice was received by National Bank of India on 26th October, 2019. The
time period within which the defects must be rectified by National Bank of India, so that insolvency
process may be started by the National Company Law Tribunal, Delhi.
(a) latest by 31st October, 2019
(b) latest by 2nd November, 2019
(c) latest by 5th November, 2019
(d) latest by 10th November, 2019
Q.4 In the given case study, Armaan, as ‘financial creditor’, could also move an application for corporate
insolvency resolution process because non-payment of debt by ABC (P) Ltd. was much more than the
minimum amount stipulated for triggering a default against the company. Indicate that minimum
amount by choosing the correct option:
(a) Rs. 50,000
(b) Rs. 1,00,000
(c) Rs. 10,00,000
(d) Rs. 1, 00,00,000

30. Chapter 21 Integrated Case Studies
21.13
Answer – Integrated Case Study 4
Q. No. Answer Reason
Q.1 (b) According to Section 7 (6), the corporate insolvency resolution process shall commence from
the date of admission of the application.
Q.2 (b) Refer First Proviso to Section 21 (2) which states that a financial creditor, who is a related
party of the corporate debtor, shall not have any right of participation or voting in a meeting
of the Committee of Creditors (CoC). Radhika being a director of the company was a ‘related
party’ in terms of Section 5 (24).
Q.3 (b) According to Proviso to Section 7(5), any defect in the application needs to be rectified
within 7 days of receipt of notice from the Adjudicating Authority. As the notice of NCLT was
received by National Bank of India on 26th October, 2018, so it needs to be rectified within 7
days of receipt of notice i.e. latest by 2nd November, 2018.
Q.4 (b) Refer Section 4(1) which states that the insolvency and liquidation in respect of corporate
debtors shall be triggered where the minimum amount of the default is Rs. 1,00,000.
Note: From Nov. 20 exam, answer will be (d) as limit revises to Rs. 1 Crore vide MCA notification
dated 24.03.2020.

31. Integrated Case Studies Chapter 21
21.14
Integrated Case study - 5
The issued and paid up capital of Satyam Textiles Limited (a Listed Entity) is ₹5 crores consisting of
5,00,000 equity shares of ₹100 each. The said company has 500 members.
The Board of Directors of the comprised of 9 directors namely:
Mr. Alpha Mr. Delta Mr. Zen
Mr. Beta Mr. Hexa Mr. Lee
Mr. Gamma Ms. Zuu Mr. Xuu
Out of the nine directors, Mr. Alpha, Mr. Delta and Mr. Lee. are Independent Directors in the company. The
Articles of Association of company provides that the sitting fees for each meeting of directors can be fixed
upto ₹1,00,000 per meeting.
In lieu of the increased responsibilities of directors, the entity is planning to increase the fees of directors
beyond ₹1,00,000 per meeting.
However, at the same time, company seeks guidance whether the sitting fees of Independent director for
each meeting of board and committee(s) thereof can be fixed at ₹70,000 which is lower as compared to
earlier years. Management of the Company is also planning to decrease the remuneration of independent
directors as compared to earlier year due to their limited role in the operations of the company.
The Listed Entity shall need to give Disclosure in the Boards’ Report regarding the Top 10 Employees in
terms of the remuneration drawn and other details including name of every employees employed
throughout the year or part of the year drawing remuneration beyond specified limit.
For the purpose of carrying out the valuation of the immovable properties standing in the name of the
company as required under the provisions of the Companies Act, 2013, Board of Directors of the company
proposes to appoint Mr. Mehta, an individual as the valuer.
In light of the above facts of the case scenario, answer the following Multiple-Choice Questions:
Q.1 Considering the statutory provisions of Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the maximum sitting fees permitted for payment to directors of Satyam
Textiles Limited can be _____________.
(a) ₹90,000
(b) ₹1,00,000
(c) ₹1,00,100
(d) ₹1,00,101
Q.2 Decide whether the fees of Independent Directors of Satyam Textiles Limited can be decreased to
₹70,000 without decreasing the fees of other directors?
(a) Fees of Independent Directors of Satyam Textiles Limited can be decreased to ₹70,000 without
decreasing the fees of other directors.
(b) Fees of Independent Directors of Satyam Textiles Limited can be decreased to ₹70,000 without
decreasing the fees of other directors subject to approval of the board
(c) Fees of Independent Directors of Satyam Textiles Limited cannot be decreased to ₹70,000 without
decreasing the fees of other directors.
(d) Fees of Independent Directors of Satyam Textiles Limited can be decreased to ₹70,000 without
decreasing the fees of other directors subject to approval of the Central Government.

32. Chapter 21 Integrated Case Studies
21.15
Q.3 Board of Directors seeks your guidance as to the mode by which the remuneration to the
independent directors can be paid out of the following options:
(i) Monthly payment
(ii) Specified percentage of the net profit
(iii) Partly by monthly payment or partly by specified percentage of the net profit
Guide the Board of Directors as to the permissible mode of payment under the law.
(a) Option (i) and Option (ii)
(b) Option (ii) and Option (iii)
(c) Option (iii) only
(d) Option (i) or Option (ii) or Option (iii)
Q.4 The Board Report of the listed entity shall include a statement showing the names of top ten
employees in terms of remuneration drawn and the name of every employee of the company, who if
employed throughout the financial year, was in receipt of remuneration for that year, which, in the
aggregate, was not less than ____________________.
(a) ₹ 1.00 Crore
(b) ₹ 1.02 Crore
(c) ₹ 1.05 Crore
(d) ₹ 1.10 Crore
Q.5 A petition was submitted before the Tribunal signed by 40 members holding 10,000 equity shares of
the company for the purpose of relief against oppression and mismanagement by the majority
shareholders. Examining the provisions of the Companies Act, 2013, decide whether the said petition
is maintainable.
(a) Petition is maintainable
(b) Petition is not maintainable as it must be signed by atleast 50 members
(c) Petition is not maintainable as it must be signed by atleast 100 members
(d) Petition is not maintainable as it must be signed by members holding atleast 20,000 equity shares.
Q.6 Referring to the provisions of the Companies Act, 2013 read with the Companies (Registered Valuers
and Valuation) Rules, 2017, the Audit Committee is of the opinion that the Board of Directors does
not have right to appoint the valuer. Decide.
(a) Opinion of Audit Committee is incorrect as Board of Directors have right to appoint the valuer.
(b) Opinion of Audit Committee is correct as appointment of valuer is to be made by audit committee.
Board of Directors can appoint valuer only in absence of Audit Committee.
(c) Opinion of Audit Committee is incorrect as appointment of valuer is to be made by Nomination and
Remuneration Committee. Board of Directors can appoint valuer only in absence of Nomination and
Remuneration Committee.
(d) Opinion of Audit Committee is incorrect as appointment of valuer is to be made by Stakeholders
Relationship Committee. Board of Directors can appoint valuer only in absence of Stakeholders
relationship Committee.

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