50 Complex Questions (Debt Recovery, Cheque Bounce, Financial Fraud & Commercial Matters)

#	Domain	Complex Test Question	Right Answer (with citations)
1	Debt Recovery – RDDBFI	What is the current pecuniary threshold for banks to file an Original Application before a Debt Recovery Tribunal (DRT) and may separate loan accounts of the same borrower be clubbed to reach this limit?	A bank/FI can approach a DRT only if the “debt due” is at least ₹20 lakh (raised from ₹10 lakh by the 2016 amendment). Separate facilities of the same borrower can be aggregated; the Act uses the expression “debt due” from any person, enabling clubbing of multiple accounts of that person to meet jurisdictional value[1][2].
2	Debt Recovery – SARFAESI	After issuing a 60-day demand notice under s. 13(2), can a secured creditor simultaneously pursue a DRT suit on the same debt, and what happens if it does?	No. Once s. 13 proceedings are invoked, the remedy is in rem and exclusive; parallel civil/DRT recovery is barred until SARFAESI action is concluded. Filing both is an abuse of process—Mardia Chemicals v ICICI Bank is the controlling precedent[3][4].
3	DRT Procedure	State the statutory time-frame and fee rules for filing a counter-claim under s. 19(8) RDDBFI, and whether a guarantor may raise an independent counter-claim.	A counter-claim must be filed within 30 days of OA service (extendable by 15 days for sufficient cause) and court-fee mirrors OA fee (Rule 7 & Sch. to DRT Rules 1993)[2]. A guarantor arrayed as defendant may file a separate counter-claim on any connected cause of action, because s. 19(8) applies to “the defendant or guarantor”.
4	SARFAESI – ARC Transfer	Does a borrower have any right of prior hearing when a bank assigns its NPAs to an Asset Reconstruction Company under s. 5, and what is the fate of existing guarantees?	Assignment is a statutory transfer; no audi alteram partem is prescribed. On assignment, all rights, securities, guarantees and pending suits automatically vest in the ARC (s. 5(3)). Guarantors remain liable to the ARC exactly as they were to the bank[4].
5	SARFAESI Limitation	What limitation applies to enforcement of a mortgage under SARFAESI and how is it computed?	By s. 36 SARFAESI, secured action must be taken within the limitation period for a like civil suit (Art. 61(a) Limitation Act – 12 years from the date the money becomes due). The clock pauses once the demand notice under s. 13(2) is issued within that period[4].
6	SARFAESI Possession	Which magistrate has jurisdiction under s. 14 to assist a bank in taking possession, and can the magistrate examine the validity of the debt?	Jurisdiction lies with the Chief Metropolitan Magistrate or District Magistrate where the secured asset is situated. The magistrate performs an administrative function and cannot adjudicate the debt’s validity; his inquiry is limited to checklist compliance with s. 14 clauses[5].
7	DRT Appeals	What is the limitation for filing an appeal to the DRAT under s. 20 RDDBFI and what pre-deposit is mandated?	Appeal must be filed within 30 days of the DRT order (delay condonable on sufficient cause). The appellant must deposit 50% of the debt determined (DRAT can reduce to not below 25%) as a condition precedent[6].
8	Interest Before DRT	Can a bank include future contractual interest in its OA claim, and how should it be quantified?	Yes. Rule 12 & Form I of DRT Rules require breakup of principal, interest already accrued, and future interest (with rate, periodicity and computation basis) up to realisation. Tribunal’s final order separately specifies future interest under s. 19(20)[2].
9	DRAT Execution	Does a DRAT decree require transfer to a civil court for execution?	No. s. 25 RDDBFI empowers the Recovery Officer of the DRT (not a civil court) to execute recovery certificates; DRAT decrees are transmitted to the Recovery Officer who applies the modes in s. 25-29[7].
10	Cheque Bounce – Post-dated Cheque	If a post-dated cheque is presented prematurely and bounces marked “post-dated”, does s. 138 lie? What if it is re-presented on or after the due date and dishonoured for funds insufficiency?	Premature presentment is not “legally enforceable debt on the date of presentment”; such dishonour is outside s. 138[8]. Re-presentation after the due date revives liability; a fresh 30-day notice after the second dishonour enables a valid s. 138 prosecution[9].
11	Territorial Jurisdiction	Where the payee deposits a cheque through Branch X of his bank, which court tries the s. 138 complaint after the 2015 & 2018 amendments?	Jurisdiction lies with the court within whose limits Branch X (collection branch) is located (s. 142(2)(a)). If the payee maintains multiple accounts, only the branch used for that cheque governs jurisdiction[10].
12	Interim Compensation	Is it mandatory for courts to grant interim compensation under s. 143A NI Act?	No. SC in Rakesh Ranjan Shrivastava ruled the power is discretionary; courts must record reasons while exercising it[10].
13	Director’s Liability	What must be pleaded to fasten vicarious liability on a company director under s. 141 NI Act?	Complaint must aver that the director was “in charge of and responsible for the conduct of business” at the time of offence. Bald designation is insufficient. SC (2024) clarified liability cannot be fastened merely because one is a director[11].
14	Compounding After Summons	May a cheque-bounce accused be discharged by compounding after summons but before plea, and does court consent matter?	Offence is compoundable any time; court’s consent is mandatory once proceedings commence (s. 147 NI Act). If compounded pre-plea, no conviction ensues and accused stands discharged; court records compromise and terminates the case[9].
15	Financial Fraud – PMLA Attachment	Is there any statutory limitation for provisional attachment of property under s. 5 PMLA where laundering is discovered years after the predicate crime?	PMLA prescribes no limitation; attachment may issue whenever the ED has “reason to believe” proceeds of crime still exist. The continuing-offence doctrine treats laundering as ongoing until tainted assets are projected as untainted[12].
16	PMLA Bail (Twin Test)	Explain the twin conditions for bail under s. 45(1) PMLA and whether they apply after a court takes cognisance.	The court must (i) be satisfied there are reasonable grounds to believe the accused is not guilty, and (ii) unlikely to re-offend. SC in Nikesh Tarachand read down the original clause but Parliament re-introduced it in 2018; the twin test applies even post-cognisance until completion of trial[12].
17	ED Powers – Attachment of Third-Party Property	Can ED provisionally attach property in the name of an unrelated third party who purchased assets with layered funds?	Yes. s. 2(u) “proceeds of crime” includes any property directly or indirectly derived from the scheduled offence. If ED traces the tainted value into third-party hands, attachment is permissible unless the buyer is a bona-fide purchaser for value without knowledge[12].
18	FEMA – Export Advance Default	An Indian exporter receives USD 200,000 advance but neither ships goods nor refunds within RBI-prescribed six-month period. What contravention arises and potential penalty?	Violation of s. 8 (realisation of forex) read with Rule 6 Current Account Rules. Penalty under s. 13 FEMA up to 3 × amount involved (≈ USD 600k) and ED may seize equivalent Indian assets during adjudication[13][14].
19	Structuring Offence	Repeated cash deposits of INR 9,90,000 are made to avoid CTR threshold. Which offence is triggered and who prosecutes it?	“Structuring” to avoid reporting breaches ss. 142-143 AML/CTF Act 2006; prosecuted by AUSTRAC-equivalent in India under s. 31 FTR Act. Each structuring act is a separate offence carrying fine or imprisonment[15].
20	Competition – Parallel Pricing	Can the CCI infer cartelisation solely from identical price movements without direct proof of meetings?	Yes. Section 3(1) read with s. 2(b) allows inference from circumstantial evidence. Conscious parallelism plus “plus-factors” (eg, simultaneous price hikes, absence of cost justifications) suffices to prove an “agreement”[16][17].
21	Leniency Policy	What relief can a cartel member obtain under s. 46 Competition Act and what are the pre-conditions?	First applicant providing vital evidence may get up to 100% penalty immunity; later applicants can receive 50%/30% reductions. Full, continuous and expeditious cooperation with CCI is mandatory[18].
22	Bid-Rigging Penalty	For bid-rigging in a public tender lasting five years, what is the maximum monetary penalty CCI may impose?	Under s. 27(b), penalty can be up to 10% of the turnover for each continuing year of infringement; if deemed a cartel, CCI may alternatively levy 3 × profit of each year, whichever is higher[19].
23	Oppression – Dilutive Rights Issue	Can a 2% shareholder attack a rights issue priced below NAV as oppressive, and what statutory reliefs are open?	Yes, dilution engineered to prejudice minority can be oppression. Under ss. 241-242, NCLT may: set aside the issue, re-price shares, order majority to buy the minority at fair value, or regulate future capital issues[20][21][22].
24	Derivative Action	Is court leave necessary for a shareholder derivative suit alleging misappropriation by directors in an unlisted company?	Yes. Rule 1, Order 1A of the Companies (Prospectus & Allotment) Rules—read with common-law principle—requires court permission to sue in a representative capacity to protect against vexatious claims. Leave is granted on prima-facie showing of actionable wrong to the company.
25	Commercial Courts – Mixed Suit	A single suit claims breach of supply contract (₹2 lakh) and defamation (₹2 lakh). Is it maintainable before a Commercial Court after the ₹3 lakh threshold amendment?	Yes. Where any component is a “commercial dispute” and aggregate relief exceeds ₹3 lakh, the entire suit must be filed in the Commercial Court; bifurcation would defeat the object of the Act (s. 2(1)(c), s. 15)[23][24].
26	Pre-Institution Mediation	Is pre-institution mediation under s. 12A Commercial Courts Act compulsory when urgent interim relief is also sought in the plaint?	If the plaint contains a prayer for urgent interim relief, mediation is not mandatory. But courts scrutinise whether the relief is bona-fide urgent; if not, plaint is returned for mediation compliance (SC Patil Automation 2022)[23].
27	Commercial Appeal	Within what period must an appeal from a Commercial Court judgment be filed and can delay be condoned?	s. 13 mandates filing within 60 days; courts have held the period rigid—s. 13 begins with “notwithstanding”—but SC allows limited condonation under s. 5 Limitation Act upon showing “sufficient cause”[25].
28	IBC – Choice Between Debtor & Guarantor	Can a financial creditor file CIRP against both corporate debtor and corporate guarantor for the same debt?	Yes. Creditor has concurrent remedies; pendency of CIRP against one does not bar action against the other (SC Laxmi Pat Surana 2021). However, once a plan is approved for one, claims stand satisfied pro rata against the other[26][27].
29	CIRP Time-line	What is the outer limit for completion of CIRP including extensions and litigious pauses?	s. 12(3) as amended caps CIRP at 330 days, inclusive of all extensions and time in legal proceedings; if exceeded, proceedings must move to liquidation unless resolution is imminent[27].
30	Limitation for IBC Applications	What is the limitation period for filing s. 7 or s. 9 IBC applications and when does it start in case of acknowledgment of debt?	Article 137 applies: 3 years from default date; acknowledgment under s. 18 Limitation Act before expiry restarts the period. Partial payment or OTS proposal within three years extends limitation (SC Sesh Nath Singh 2021).
31	Arbitration – Stay for Seat Challenge	If an enforcement petition of a New-York Convention award is pending in India and the award is later set aside at the seat, must Indian court refuse enforcement?	Yes. Under s. 48(1)(e) the award ceases to be “binding”. Indian court must decline enforcement; it cannot examine correctness of seat-court decision (SC Vijay Karia 2020)[28][12].
32	Seat vs. Venue	Parties chose Paris as “venue” but law of arbitration as Indian. Which court has supervisory jurisdiction?	If agreement and conduct show Paris was intended merely as place of hearing, Indian courts remain supervisory seat. But if Paris was intended as seat (neutral forum, ICC rules), French courts hold supervisory power. Intention test per SC BGS SGS Soma 2019.
33	Foreign Award – Limitation to Enforce	Within what time must a New-York Convention award be filed for enforcement in India?	Art. 136 Limitation Act (12 years) applies because enforcement is execution of a decree (SC Government of India v Vedanta 2020). Time runs from when the award becomes final and binding[29][12].
34	Contract – Specific Performance (2018 shift)	After the 2018 amendment to Specific Relief Act, when can courts still refuse specific performance despite the remedy becoming the norm?	Courts may refuse under revised s. 14 if: performance is impossible, involves continuous supervision, is of personal service, or contract is determinable. The discretionary bar in old s. 20 is deleted, but impossibility and inequity defences survive[30][31].
35	Mutuality Doctrine	Can a minor, after attaining majority, sue for specific performance of a contract he signed while a minor?	No. Contract was void ab-initio for want of capacity; mutuality doctrine bars enforcement even after majority. Remedy is restitution under s. 65 Contract Act, not specific performance[32].
36	Frustration vs. Force Majeure	If a pandemic renders a lease commercially unviable, can tenant invoke s. 56 Contract Act to avoid rent?	No. Lease is a completed transfer of property; s. 56 applies to executory contracts, not transfers. Remedy lies under force-majeure clause or s. 108(e) TPA if property destroyed (Delhi HC Saraswati v Loesdau 2021).
37	Sale Deed Registration	Does possession with an unregistered sale agreement confer any title, and what is buyer’s sole remedy if seller refuses to register?	Mere agreement + possession confers no legal title. Ownership passes only on registered sale deed per s. 54 TPA & s. 17 Registration Act. Buyer must sue for specific performance; until decree and registration, no proprietary right accrues[33][34][35].
38	GPA Sales	Can property be conveyed in Delhi merely by executing a General Power of Attorney and will?	No. SC (Suraj Lamp & Industries 2012) disallows GPA/Will transfers; valid sale requires registered conveyance. GPA can at best create agency; it is not a transfer of ownership[36].
39	Stamp Duty Evasion	What is the civil consequence if a sale deed is undervalued and deficit stamp duty detected on registration?	Under s. 47A Indian Stamp Act, Sub-Registrar may refer to Collector; differential duty + up to 4 × penalty is payable. Deed is inadmissible in evidence until duty & penalty are paid.
40	Specific Performance – Development Agreements	Can landowners obtain specific performance against a developer who has completed only 60% construction due to regulatory embargo?	Court may decree partial specific performance under s. 20(3) SRA 1963—ordering completion to the feasible extent and equitable compensation for remainder—if that best attains justice; otherwise damages substitute[31].
41	Commercial Arbitration v. Commercial Court	Does the Commercial Court Act oust s. 37 A&C Act appeals in arbitration matters?	No. SC & multiple HCs hold Commercial Courts Act is procedural; s. 37 A&C Act remains a self-contained code. Appeals from orders under s. 34/9 lie as per s. 37 before Commercial Appellate Division, not under s. 13(1) CCA[37].
42	Foreign-Currency Loan – FEMA	May an Indian LLP borrow USD 1 million from its non-resident partner for working capital without RBI approval?	ECB framework permits LLPs to raise foreign-currency loans only under automatic route up to USD 750k per FY with 3-year minimum maturity; USD 1 m exceeds limit and needs prior RBI approval (FEMA 3/2000 regs.)[38].
43	Compounding FEMA	Within how many days must a contravener pay the sum ordered in a FEMA compounding order and what if he defaults?	Payment must be made within 15 days of order; default revives full adjudication and possible fresh penalties plus prosecution under s. 13 & 15 FEMA[13].
44	Money-Laundering – Bankers’ Liability	Can a bank be prosecuted for a customer’s laundering if it filed STRs but allowed transactions?	Yes, if bank was “reckless” in facilitating transactions ignoring ML/TF risk; but mere filing of STRs may show diligence. Corporate criminal liability arises where intent/knowledge can be imputed to officers under Ch. 10 Div 400 Criminal Code analogously applied by Indian courts[15].
45	Product Liability – Consumer Act	A fintech platform misleads small investors with algorithmic return projections. Is this an “unfair trade practice” under CPA 2019 and what relief can CCPA grant?	Yes, false or misleading representation about future returns is an unfair trade practice (s. 2(47)(g) CPA). CCPA may order recall, refund, discontinue misleading ad and impose penalty up to ₹50 lakh on manufacturer/endorser (ss. 20-21)[39][40].
46	Unfair Trading – Digital Dark Patterns	Does Indian consumer law address “dark pattern” consent boxes pre-ticked for recurring payments?	Such designs amount to unfair trade practice—unconsented payment—violating RBI e-mandate norms and s. 2(47)(vi) CPA (imposing unreasonable charge without consent). CCPA can injunct the practice and impose penalties[41].
47	Banking Fraud – Customer Liability	Under RBI’s 2022 Master Direction, what is customer liability for unauthorised e-banking transaction reported after 75 days?	Bank has no obligation to credit after 75 days; liability rests entirely on customer unless bank proves system failure/negligence. However, Ombudsman may order ex-gratia if bank’s alerts were deficient[42].
48	Cartel Leniency – Confidentiality	Can information supplied by a leniency applicant be disclosed in follow-on damages suits?	CCI Regulations protect identity & evidence, but Competition Appellate Tribunal may allow disclosure if just and expedient. Delhi HC (2024) held confidentiality is not absolute; balancing test applies between fair-trial rights and leniency incentives.
49	IBC – Avoidance Transactions	What look-back period applies for “preferential transactions” in CIRP and who bears the burden of proof?	2 years for related-party transactions, 1 year for others (s. 43(4)). Resolution Professional must show (i) transfer during look-back, (ii) creditor benefited, (iii) debtor insolvent at transfer time. Burden then shifts to beneficiary to prove ordinary-course exception.
50	Enforcement of Foreign Judgment	How can a US district-court money judgment be executed in India and what limitation period applies?	US is a non-reciprocating territory; decree-holder must file a fresh civil suit on the judgment (s. 13-14 CPC). Limitation is 3 years from date of judgment. Once Indian decree is passed, execution proceeds under Order 21 CPC[12].

These 50 nuanced Q-and-A pairs probe statutory text, recent amendments, landmark rulings and regulatory practice across Indian debt recovery, cheque dishonour, money-laundering, FEMA, competition, commercial litigation and allied areas, offering a rigorous benchmark for evaluating any legal-research AI operating in India.