Legal and Regulatory Aspects of Bank - 2 (JAIIB)

As per Rule 3 of the Rules notified by Notification No. 9/2005, every banking company, financial institution and intermediary shall maintain a record of all cash transactions of the value of more than Rs. 10 lac or its equivalent in foreign currency. Thus, option 4 is the correct answer.

Section 49-A of Banking Regulation Act, 1949 states that no person, other than a banking company, the Reserve Bank, the State Bank of India or any other 21 banking institution [firm or other person that are notified by the Central Government in this behalf on the recommendation of the Reserve Bank] shall accept from the public, deposits of money withdrawable by cheque. Thus, only (c) is true. 

Section 6(1) in BANKING REGULATION ACT,1949 permits:
the buying, selling and dealing in bullion and specie, undertaking and executing trusts, undertaking the administration of estates as executor, trus­tee or otherwise and the providing of safe deposit vaults.

On the basis of a promissory note, one can file a suit for recovery of money latest by the completion of third year. The given promissory note is dated September 22, 2006. Thus, suit can be filed latest by September 21, 2009.

The Reserve Bank may make an application under this section for the winding up of a banking company if the banking company has failed to comply with the requirements specified in Section 11 or has by reason of the provisions of Section 22 become disentitled to carry on banking business in India or has been prohibited from receiving fresh deposits by an order under clause (a) of Sub-section (4) of Section 35 or under clause (b) of Sub-section (3A) or Section 42 of the Reserve Bank of India Act, 1934. If the company has failed to comply with any requirement of the Act other than the requirements laid down in Section 11, has continued such failure, after notice in writing of such failure or contravention has been conveyed to the banking company.

This criterion is used by the nomination committee before an appointment of a person as director or after a person is appointed as director on continuing basis.

Section 45s of RBI Act relates to 'deposits not to be accepted in certain cases'. Under this, no person, being an individual or a firm or an unincorporated association of individuals, shall accept any deposit. Thus, option 1 is correct.

If any securitisation company or reconstruction company fails to comply with any direction issued by the Reserve Bank under Section 12, such company and every officer of the company who is in default, shall be punishable with fine which may extend to Rs. 5 lac rupees. In the case of a continuing offence, with an additional fine which may extend to Rs. 10 thousand for every day during which the default continues.

Section 10(1) of Banking Regulation Act, 1949 states that no banking company shall employ or be managed by a managing agent.

Regional rural banks are body corporates that are created under a special statute. They were established under the provisions of an ordinance passed on September, 1975 and the RRB Act, 1976 to provide sufficient banking and credit facility for agriculture and other rural sectors. These were set up on the recommendations of The M. Narasimham Working Group during the tenure of Indira Gandhi's government with a view to include rural areas into economic mainstream. At that time, about 70% of the Indian population was of rural orientation. 

The Preamble of the RBI describes its basic function. They are to regulate the issue of bank notes, keep reserves to secure monetary stability in India and generally to operate the currency and credit system in the best interests of the country. Thus, option 1 is correct. 

Section 6(1)(o) of Banking Regulation Act deals with any other form of business which the Central Government may, by notification in the Official Gazette, specify as a form of business in which it is lawful for a banking company to engage. Thus, option 2 is correct. 

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For banking business, the banking companies are licensed by Reserve Bank of India. Under Banking Regulation Act, 1949, no company shall carry on banking business in India unless it holds a license issued on that behalf by the Reserve Bank.

Reserve Bank can issue directions under (Section 35-A) public interest and (Section 21) relating to loans.

Under Limitation Act, 1963, in computing the period of limitation for any suit, the time during which the defendant has been absent from India and from the territories outside India under the administration of the Central Government, shall be excluded.

Section 21-A of Banking Regulation Act relates to rate of interest that is fixed by banks, as per RBI guidelines, are not subject to scrutiny by courts.

Notwithstanding, anything contained in the Usurious Loans Act, 1918 (10 of 1918), or any other law relating to indebtedness in force in any state, a transaction between a banking company and its debtor shall not be reopened by any court on the ground that the rate of interest charged by the banking company in respect of such transaction is excessive. 

Any bank can file a suit within 3 years for instalments not paid from due date of respective instalment and also the balance amount, if the agreement provides for that. Thus, option 3 is the correct answer. 

Securitisation of NPAs is a process where non-liquidated financial assets (dues from a borrower) are converted into marketable securities (security receipts), that can be sold to investors.

Under Section 36AA, power of Reserve Bank to remove managerial and other per­sons from office, Reserve Bank may, for reasons to be recorded in writing, by order, remove from office, with effect from such date as may be specified in the order, 2 [any chairman or director] chief executive officer (by whatever name called) or other officer or employee of the banking company.
Any person against whom an order of removal has been made, within thirty days from the date of communication to him of the order.

For an Indian bank, as per Section-11 of Banking Regulation Act, the aggregate value of its paid-up capital and reserves shall not be less than:
(i) if it has places of business in more than one state, Rs. 5 lac, and if any such place or places of business is or are situated in the city of Bombay or Kolkata or both, Rs. 10 lac.
If it has all its places of business in one state, none of which is situated in the city of Bombay or Kolkata, Rs. 1 lac in respect of its principal place of business, plus Rs. 10 thousand in respect of each of its other places of busi­ness situated in the same district in which it has its principal place of business, plus Rs. 25 thousand in respect of each place of business situated elsewhere in the state, other­wise in the same district.

Under Limitation Act, 1963, in computing the period of limitation for any suit, appeal or application, the day from which such period is to be reckoned, shall be excluded. 

Two copies of balance sheet and profit and loss account, prepared by banks, are to be submitted to RBI within three months. Banking companies are also to submit three copies to Company Law Board. Every miscellaneous non-banking company shall deliver to the Reserve Bank, unless it has done so already, an audited balance sheet as on the last date of each financial year and an audited profit and loss account in respect of that year as passed by the company in general meeting together with a copy of the report of the Board of Directors laid before the company in such meeting in terms of Section 217(1) of the Companies Act, 1956 (1 of 1956) within fifteen days of such meeting.

It is to ensure that only those banks are continuing which were operating on sound lines and to prevent indiscriminate formation of banking companies.

Banks that were nationalised in 1969 and 1980 draw power from Banking Companies (Acquisition and transfer of Undertakings) Act of 1969 and 1980. They are known as nationalised banks.

The fringe benefits tax (FBT) was the tax applied to most, although not all, fringe benefits in India. A new tax was imposed on employers by India's Finance Act, 2005 for the financial year commencing April 1, 2005.
It covered employer's expenses on entertainment, travel, employee welfare and accommodation. The definition of fringe benefits that have become taxable has been significantly extended. The law provides an exact list of taxable items.

Under Banking Regulation Act, 1949, 21(A), rate of interest charged by banking companies will not to be subject to scrutiny by courts. Notwithstanding anything con­tained in the Usurious Loans Act, 1918 (10 of 1918) or any other law relating to indebtedness in force in any state, a transaction between a banking company and its debtor shall not be re-opened by any court on the ground that the rate of interest charged by the banking company in respect of such transaction is excessive.

The provisions of this act are applicable only for NPA loans with outstanding above Rs. 1 lac. NPA loan accounts where the amount is less than 20% of the principal and interest are not eligible to be dealt with under this act.

RBI fixes SLR (statutory liquidity ratio) from time to time – currently it is at 25%. RBI requires banks to maintain 25% of Net Demand and Time Liabilities (NDTL) which is to be maintained on daily basis by investment in cash (other than CRR) and unencumbered prescribed Central and State Government securities, treasury bills and Government Guaranteed Bonds. These securities are approved securities for SLR purposes under Section 24 of the Banking Regulation Act, 1949 and Indian Trust Act, 1882 and are issued under Public Debt Act, 1944.

A scheduled bank, in India, refers to a bank which is listed in the 2nd Schedule of the Reserve Bank of India Act, 1934.
The further classification of scheduled banks is as follows:
Scheduled commercial banks
Nationalised banks
State Bank of India and its associates
Regional Rural Bank (RRBs)
Foreign banks
Other Indian private sector banks
Scheduled cooperative banks
Scheduled state cooperative banks
Scheduled urban cooperative banks
 

Legal Services Authority Act is to constitute legal services authorities to provide free and competent legal services to the weaker sections of the society to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities and to organise Lok Adalats to secure that the operation of the legal system promotes justice on a basis of equal opportunity.
Thus, option 3 is the correct answer. 

Amalgamation is the combination of one or more companies into a new entity. Thus, option 3 is incorrect.

The full form of SARFAESI Act is Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Banks utilise this act as an effective tool for bad loans (NPA) recovery. It is possible where non-performing assets are backed by securities charged to the bank by way of hypothecation or mortgage or assignment.
Thus, option 4 is the correct answer.

In November 1994, RBI constituted the Board for Financial Supervision (BFS) under RBI (BFS) Regulations, 1994 to give undivided attention to the prudential supervision and regulation of banks, financial institutions and non-bank financial institutions in an integrated manner.

Action under provisions of SARFAESI Act cannot be initiated by (RRB) Regional Rural Banks.

Publication only in a newspaper that is published every day is not true with regards to publication of accounts and balance sheet of a bank. 

RBI's original share capital was divided into shares of 100 each fully paid, which were initially owned entirely by private shareholders. Following India's independence on 15 August, 1947, the RBI was nationalised on 1 January, 1949. Afterwards, majority of share capital in RBI was held by Central Government.

FEMA was passed in the winter session of Parliament in 1999, replacing the Foreign Exchange Regulation Act (FERA). It extends to whole of India. Also, activities such as payments made to any person outside India or receipts from them are also involved. Thus, option 4 is the correct answer.

Section 36-A of BR Act deals with certain provisions of the act that do not apply to certain banking companies. Option 4 states the wrong and hence, it is the correct answer.

The bank is not liable to any endorsee or holder of a cheque, except when the bank is wound up, the holder of a cheque (issued by a customer of bank having sufficient funds), becomes creditor who is entitled to make a claim.

Section 42 in Reserve Bank of India Act, 1934 regarding cash reserves of scheduled banks to be kept with RBI.
(1) Every bank included in the Second Schedule shall maintain with the Bank an average daily balance the amount of which shall not be less than such percent of the total of the demand and time liabilities in India of such bank as shown in the return referred to in sub-section.
(2) The Bank may from time to time, having regard to the needs of securing the monetary stability in the country, notify in the Gazette of India.

According to Section 26 in Banking Regulation Act, 1949 return of unclaimed deposits states that every banking company shall, within thirty days after the close of each calendar year, submit a return in the prescribed form and manner to the Reserve Bank as at the end of such calendar year of all accounts [in India] which have not been operated upon for ten years, provided that in the case of money deposited for a fixed period the said term of ten years shall be reckoned from the date of the expiry of such fixed period, provided further that every regional rural bank shall also furnish a copy of the said return to the National Bank.

Various forms/returns are given in the Banking Regulation (Co-operative Societies) Rules, 1966. All the mentioned returns, except quarterly return of NPA advances u/s 42 of RBI Act, are the various returns submitted to RBI. 

Introduction is not necessary for opening of accounts under PML Act and Rules or Reserve Bank’s extant KYC instructions. Banks should not insist on introduction for opening bank accounts of customers.
All of the above statements are correct.

Notwithstanding anything to the contrary contained in Section 235 of the Companies Act, 1956 (1 of 1956)], Reserve Bank at any time may, and on being directed so to do by the Central Government, shall cause an inspection to be made by one or more of its officers of any banking company and its books and accounts, and Reserve Bank shall supply to the banking company a copy of its report on such inspection. However, 35-A talks about the power of the Reserve Bank to give directions in the interest of public interest and banking policy. 

For banking companies (private banks), it is prepared as per part I of Schedule VI of Companies Act.
At the expiration of each calendar year or at the expiration of a period of twelve months ending with such date as the Central Government may, by notification in the Official Gazette, specify in this behalf, every banking company incorporated in India, in respect of all business transacted by it and every banking company incorporated outside India, in respect of all business transacted through its branches in India, shall prepare with reference to that year or period, as the case may be, a balance-sheet and profit and loss account as on the last working day of that year or the period, as the case may be in the form set out in the Third Schedule or as near thereto as circumstances admit.

Budget 2016 has proposed to impose a cess, called the Krishi Kalyan Cess, @ 0.5% on all taxable services. The new effective service tax could henceforth be 15%. 

RTI Act, 2005 is an act to provide for setting out the practical regime of right to information for citizens to secure access to information under the control of public authorities, in order to promote transparency and accountability in the working of every public authority, the constitution of a Central Information Commission and State Information Commissions and for matters connected therewith or incidental thereto.

As per Section 68 of Indian Contract Act, if necessities are supplied to minor, it is a valid agreement. Minor can also be beneficiary.

Amalgamation is the combination of one or more companies into a new entity. An amalgamation is distinct from a merger because neither of the combining companies survives as a legal entity. A completely new entity is formed to house the combined assets and liabilities of both companies. Thus, option 2 is the correct answer.

Section 22 in Banking Regulation Act,1949 states that no company shall carry on banking business in India, unless it holds a licence issued on that behalf by the Reserve Bank and any such licence may be issued subject to such condi­tions as the Reserve Bank may think fit to impose.

Section 7 in Banking Regulation Act,1949 states that no company, other than a banking company, shall use as part of its name (or in connection with its business) any of the words “bank”, “banker” or “banking” and no company shall carry on the business of banking in India unless it uses as part of its name at least one of such words. No firm, individual or group of individuals shall, for the purpose of carrying on any business, use as part of its or his name any of the words “bank”, “banking” or “banking compa­ny”. 

The collection should be for the apparent tenor of the instrument in good faith and without negligence to any person in possession thereof under circumstances which do not afford a reasonable ground for believing that he is not entitled to receive payment of the amount therein mentioned. However, (b) is incorrect.

The Transfer of Property Act contains provisions relating to transfer of 'actionable claims'. The transfer of an actionable claim, whether with or without consideration, shall be effected only by the execution of an instrument in writing and signed by the transferor or his duly authorised agent, shall be complete and effectual upon the execution of such instruments and thereupon, all the rights and remedies of the transferor, whether by way of damages or otherwise, shall vest in the transferee, whether such notice of the transfer as is hereinafter provided be given or not.

Negotiable Instruments Act states that a cheque should have the following characteristics:
(1) It must be in writing
(2) It must contain an unconditional order to pay money only and not merely a request
(3) It must be signed by the drawer
(4) The parties must be certain
(5) The sum payable must also be certain
(6) It must comply with other formalities e.g. stamps, date etc
Thus, option 4 is the correct answer.

A floating charge is a security, such as a mortgage or a lien, that has an underlying asset or group of assets which is subject to change in quantity and value. When businesses use floating charges, it does not affect their ability to use the underlying asset as normal. Only if the company fails to repay the loan or goes into liquidation does the floating charge become "crystallised" or frozen into a fixed charge and the lender becomes the first-in-line creditor to be able to draw against the underlying asset.
A floating charge is a particular type of security, available only to companies. It is an equitable charge on (usually) all the company's assets, both present and future, on terms that the company may deal with the assets in the ordinary course of business. Very occasionally, the charge is over just a class of the company's assets, such as its stock. 

Section 10 in the Negotiable Instruments Act, 1881 concerns “Payment in due course”.
Section 131-A in the Negotiable Instruments Act, 1881 is for non-liability of banker receiving payment of cheque.
Thus, option 4 is the correct answer (conversion means unauthorised interference in property of a third party).

The Foreign Exchange Management Act, 1999 (FEMA) is an act of the Parliament of India "to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.

Beneficiary is the party who is to receive the benefit (payment) of the LC. The consignee of an LC and the beneficiary may not be the same. The credit is issued in the beneficiary's favour.

Guarantee contract is to perform the obligation or to discharge the liability of a third party in case of its default. Thus, option 4 is the correct option.

Financial guarantee is the type of bank guarantee which is issued by a bank and furnished by a bank’s customer in lieu of earnest money or the security to be deposited with the beneficiary of the bank guarantee for the performance of a contract. These guarantees are given in lieu of purely monetary obligation (the obligation of contractor to make earnest money deposit/guarantees to give to sale-tax department etc).

A mortgage by conditional sale is where the mortgagor sells the property to the mortgagee on the condition that in case of default of repayment of the mortgage money, the sale will become absolute and on repayment of the money, the sale will become void and the mortgagee will transfer the property back to the mortgagor. Thus, option 2 is the correct answer.

A citizen has a right to obtain information in the form of diskettes, floppies, tapes, video cassettes or in any other electronic mode or through print-out. Provided information is already stored in a computer or in any other device from which the information may be transferred to diskettes.

If a property's title has multiple mortgage liens and the loan secured by a first mortgage is paid off, the second mortgage lien will move up in priority and become the new first mortgage lien on the title. Documenting this new priority arrangement will require the release of the mortgage securing the paid-off loan. Thus, the priority will be according to the date. As mortgage in favour of Bank A was on January 14, 2007 and was the earliest, thus, will be dealt first and subsequently Bank B (January 28, 2007) and Bank C (February 10, 2007).

Records should be maintained for all cash transactions where forged or counterfeit currency notes or bank notes have been used as genuine and where any forgery of a valuable security has taken place.

Correct Answer: Overdraft which is not availed

Hypothecation is used for creating charge against the security of movable assets, but here the possession of the security remains with the borrower itself. Thus, in case of default by the borrower, the lender (to whom the goods/security has been hypothecated) will have to first take possession of the security and then sell the same.
The best example of this type of arrangement is car loan. In this case, car/vehicle remains with the borrower but the same is hypothecated to the bank/financer. In case the borrower defaults, banks take possession of the vehicle after giving notice and then sell the same and credit the proceeds to the loan account.

Two conditions are necessary to enable a partner to sue his co-partners or the- firm. First, the firm should be registered and second, the name of the partner suing must figure in registration. The scope of the sub-section was examined by the Bombay High Court in S. H. Patel v. Husseinbhai Mohd, a case where the action was between two former partners to enforce an agreement restraining the outgoing partner from carrying on in some area of any business similar to that of the firm and the court had to examine whether such suit was maintainable the firm being unregistered.

The guidelines for nature of records to be maintained by a bank under Prevention of Money Laundering Act, 2002 are issued by RBI and SEBI from time to time.

It is to provide for setting out the practical regime of right to information for citizens to secure access to information under the control of public authorities, in order to promote transparency and accountability in the working of every public authority, the constitution of a Central Information Commission and State Information Commissions and for matters connected therewith or incidental thereto. There is no prescribed form of application for seeking information as the application can be made on plain paper. The information seeker is not required to give reasons for seeking information. 

Floating charges, as the name suggests, hover above a shifting pool of assets. Thus, as per the given definition, the charge is floating charge.

All companies having limited liability are required to use the term ‘limited’ or ‘private limited’. But under Section 25, companies are allowed to dispense with the use of term ‘limited’ or ‘private limited’ from their names after obtaining license from the Regional Director. This helps the company to enjoy limited liability without disclosing to the public the nature of liability of its members. 

Correct Answer: Companies Act 1956

Borrower may have to inevitably file an appeal before the Debt Recovery Tribunal (DRT) and Debts Recovery Appellate Tribunal (DRAT) under Section 17 of SARFAESI Act, 2002. Thus, option (3) is the correct answer.

In that case, the Supreme Court was dealing with the validity of the SARFAESI Act. The Court struck down Section 17(2) of the Act as ultra vires Article 14 of the Constitution of India. Thus, the complete statement is SARFAESI Act has been declared valid by Supreme Court but it struck down Section 17(2) of the Act, in the case of Mardia Chemicals vs Union of India and others, which provided for deposit of 75% of the amount due to the bank before approaching DRT.

SARFAESI Act, 2002 is applicable to housing finance companies whose names are notified by the Central Government.

An unregistered firm cannot sue any third party for the enforcement of any right arising from contract. There are two requirements of the right to sue namely, the firm should be a registered one and the person suing should appear as a partner in the registration. Also, other parties can file suit on an unregistered firm.

If the directors of a company die in an accident, the company will still exist.

Under RTI Act, 2005, the information can be accessed under control of a public authority. For this purpose, the public authority means any authority established 
(a) by or under the Constitution
(b) by any other law made by Parliament
(c) by any other law made by State Legislature
(d) by notification issued or order made by the appropriate Government
Thus, all the options are correct.

In normal course, information to an applicant shall be supplied within 30 days from the receipt of application by the public authority.

Private companies are not required to obtain a Certificate of Commencement. Also, companies without any share capital do not need such formalities. Thus, (a) and (b) are true. For public companies, Certificate of Commencement is required.

Certificate of Incorporation is conclusive evidence of coming into existence of the company.

Private companies are not required to obtain a Certificate of Commencement. Hence, statement (d) is incorrect. 

A lease of immovable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days' notice.

Correct Answer: All of the above

"Hypothecation" means a charge in or upon any movable property, existing or future, created by a borrower in favour of a secured creditor without delivery of possession of the movable property to such creditor, as a security for financial assistance and includes floating charge and crystallisation of such charge into fixed charge on movable property.

The act allows taking the matter to high courts only in some matters related to the implementation of the act in Jammu & Kashmir. However, high courts have been entertaining writ petitions under Article 226 (Power to issue writs) of the Constitution of India. It is possible where non-performing assets are backed by securities charged to the bank by way of hypothecation or mortgage or assignment.

When the SARFAESI Act was challenged, the Supreme Court in Mardia Chemicals Ltd. v. Union of India, (2004) 4 SCC 311 had upheld the validity of the SARFAESI Act, except Section 17(2) of the SARFAESI Act which required depositing 75% of the amount claimed before entertaining an appeal under Section 17 of the SARFAESI Act.

Prevention of Money Laundering Act, 2002 is an act of the Parliament of India that was enacted to prevent money-laundering and to provide for confiscation of property derived from money-laundering. It also prevents use of banking system for money laundering.

The regulations exclude few persons from the application of the regulations. They are specific family trusts, ESOP trusts (conditions), employee welfare trusts, gratuity trusts, holding companies‘ within the meaning of Section 4 of the Companies Act, 1956, securitisation trusts, securitisation company, reconstruction company registered with RBI, any such pool of funds which is directly regulated by any other regulator in India.

Under the act in consideration, to show the intention to take possession, creditor is required to obtain possession of the security by giving a notice of 60 days.

A lease is a legal document outlining the terms under which one party agrees to rent property from another party and the periodic payment made to the owner of a property for the use of said property is rent. Thus, both are different. Option 3 does not state the truth.

In terms of Section 12 of the Prevention of Money Laundering Act, 2002, every reporting entity shall maintain a record of all transactions, including the information furnished to FIU-IND, in such a manner as to enable it to reconstruct individual transactions. The record has to be maintained of the prescribed transactions and information for a minimum period of five years.

In case there is a broad agreement, the account would be classified as a fraud, else based on the majority rule of agreement amongst banks with at least 60% share in the total lending, the account would be red flagged by all the banks and subjected to a forensic audit commissioned or initiated by the consortium leader or the largest lender.

The forms prescribed by the Central Government for registration are as under:
FORM I - For creation and modification of charge.
FORM II - For particulars of satisfaction of charge.
FORM III - For securitisation or reconstruction of financial assets.
FORM IV - For satisfaction of securitisation or reconstruction of financial assets.
Thus, all the transactions need registration.

If one is aggrieved by the decision, one may, within 30 days of the date of receipt of the award, appeal against the award before the appellate authority. The appellate authority may, if he/ she is satisfied that the applicant had sufficient cause for not making an application for appeal within time, also allow a further period not exceeding 30 days.

The partnership firm to be registered under Indian Partnership Act, 1932 should be under the notice of registrar of firms of the area in which the business of the firms is conducted.

A property can be sold without intervention of court, if it is located at only Chennai, Mumbai and Kolkata or towns notified by the State Government. Thus, option 4 is the correct answer.

The guidelines for the nature of records to be maintained by a bank under Prevention of Money Laundering Act, 2002 are issued by RBI and SEBI from time to time. Under that, all the given options/records should be present. Thus, option 4 is correct.

Under Section 17-A of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, the Chairperson of Appellate Tribunal may transfer any case from one tribunal to another depending on the merits of the case within jurisdiction of appellate tribunal, if an application seeking transfer is filed.

Recovery of debt due to banks and Financial Institutions Act, 1993 Section 2(g) states that "debt” means any liability (inclusive of interest) which is claimed as due from any person by a bank or a financial institution or by a consortium of banks or financial institutions during the course of any business activity undertaken by the bank or the financial institution or the consortium under any law for the time being in force, in cash or otherwise, whether secured or unsecured, or assigned, or whether payable under a decree or order of any civil court or any arbitration award or otherwise or under a mortgage and subsisting on, and legally recoverable on, the date of the application.

Thus, option 4 is the most suitable option. 

The application shall be disposed off, as far as possible, within 180 days from the date of its receipt. A certificate will be issued to the Recovery Officer for recovery of amount of debt specified in the certificate.

Penality for furnishing false particulars within the meaning of Section 70 amounts to 3 months imprisonment or with fine or both. 

Any person aggrieved by any order made by the Debts Recovery Tribunal may go to the Appellate Tribunal within thirty days from the date of receipt of the order of Debts Recovery Tribunal.

“Bankers' books” include ledgers, day-books, cash-books, account-books and all other records used in the ordinary business of the bank, whether these records are kept in written form or stored in a micro film, magnetic tape or in any other form of mechanical or electronic data retrieval mechanism, either onsite or at any offsite location including a back-up or disaster recovery site or both. Thus, all the statements are correct.

The Limited Liability Partnership Act, 2008 was enacted by the Parliament of India to introduce and legally sanction the concept of LLP in India. Thus, option 4 is the correct answer. 

The National Consumer Disputes Redressal Commission (NCDRC), India is a quasi-judicial commission in India which was set up in 1988. Only option 3 is true. 

Corporate governance is about promoting corporate fairness, transparency and accountability. Corporate governance deals with how a corporate is governed.

Preliminary decree was ordered to be drawn up. Thereafter, as the defendants had failed to pay the decretal amount, final decree proceedings were initiated. Thus, option 2 is the correct answer. 

The minimum number of directors required in a private company is 2.

When at the desire of the promisor, the promisee or any other person has done or abstained from doing something or does or abstains from doing something, such act or abstinence or promise is called a consideration for the promise. Thus, all are true. 

No partner would be liable on account of the independent or unauthorised actions of other partners, thus allowing individual partners to be shielded from joint liability created by another partner's wrongful business decisions or misconduct.

Correct Answer: None of the above

Correct Answer: None of the above

In the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by six months' notice.

Renu Gupta and Another vs Debt Recovery Tribunal-II 
The guarantor shall not be discharged from his liability by the bank's releasing the borrower or by any act or omission of the bank legal consequence of which may be to discharge borrower or by any act of the bank which would, but for this present provision, be inconsistent with the guarantor's right as surety or by the bank's omission to do any act which, but for this present provision, the bank's duty to the guarantor would have required the bank to do. Though as between the borrower and the guarantor, the guarantor is surety only, the guarantor agrees that as between the bank and the guarantor, the guarantor is the principle debtor, jointly with the borrower and accordingly the guarantor shall not be entitled to any of the rights conferred as surety by Section 133, 134, 135, 139 and 141 or any other relevant provision of the Contract Act.

Unless the Article (Section 152 of Companies Act, 2013) provides retirement of all the directors, atleast 2/3 directors of a public company shall be persons whose period of office is liable to determination by retirement of directors by rotation. 

In the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by six months' notice.

Right to Information is an act to provide for setting out the practical regime of right to information for citizens to secure access to information under the control of public authorities, in order to promote transparency and accountability in the working of every public authority, the constitution of a Central Information Commission and State Information Commissions and for matters connected therewith or incidental thereto. All the options are true, however, option 4 is the most suitable as it covers all the aspects. Thus, option 4 is the correct answer.

An authority or body or institution of self government established or constituted by or under the Constitution, by any other law made by Parliament, by any other law made by State Legislature, by notification issued or order made by the appropriate Government.

In terms of Section 19(2) of the Banking Regulation Act, 1949, banks should not hold shares in any company except as provided in Sub-section (1) whether as pledgee, mortgagee or absolute owner of an amount exceeding 30% of the paid-up share capital of that company or 30% of its own paid-up share capital and reserves, whichever is less.