All NotesCorporate LawSARFAESI Act, 2002

SARFAESI Act, 2002

SARFAESI MCQs: Twenty Practice Questions with Answers

Twenty objective questions drawn from the provisions, figures and cases most often tested in judiciary prelims. Attempt each before checking the answer key at the end of Section 2; the explanations in Section 3 give the authority, so each wrong answer points straight back to the relevant topic.

1. Questions 1 to 10

  • Q1. An application to the DRT under s.17 lies within. (a) 30 days (b) 45 days (c) 60 days (d) 90 days.
  • Q2. Under s.13(9), consent of creditors holding at least what share in value is needed? (a) 75% (b) 66% (c) 50% (d) 60%.
  • Q3. The pre-deposit for an appeal under s.18 is. (a) 25% (b) 50% (c) 75% (d) 100%.
  • Q4. The Act does not apply where the amount due is less than what share of principal and interest? (a) 20% (b) 10% (c) 25% (d) 50%.
  • Q5. Agricultural land is excluded by s.31. (a) clause (h) (b) clause (j) (c) clause (k) (d) clause (i)
  • Q6. The period given by a s.13(2) demand notice is. (a) 30 days (b) 45 days (c) 60 days (d) 90 days.
  • Q7. After 2016, the borrower may redeem under s.13(8) until. (a) the auction (b) confirmation of sale (c) publication of the sale notice (d) issue of the sale certificate.
  • Q8. Mardia Chemicals (2004) struck down. (a) s.13(2) (b) the 75% deposit in old s.17(2) (c) s.14 (d) the s.18 deposit.
  • Q9. Co-operative banks were held to be within SARFAESI in. (a) Mardia (b) Transcore (c) Pandurang Chaugule (d) Keshavlal Khemchand.
  • Q10. A writ does not lie against a private ARC, held in. (a) Phoenix ARC (b) Satyawati Tondon (c) Hindon Forge (d) Noble Kumar.

2. Questions 11 to 20

  • Q11. The remedy against a s.14 order is. (a) writ (b) criminal revision (c) application under s.17 (d) civil suit.
  • Q12. A s.17 application lies at the symbolic-possession stage, held in. (a) Hindon Forge (b) ITC v Blue Coast (c) Kalsaria (d) Transcore.
  • Q13. Under the 2021 notification, an eligible NBFC may enforce secured debts of at least. (a) Rs 1 crore (b) Rs 50 lakh (c) Rs 20 lakh (d) Rs 10 lakh.
  • Q14. Section 26E came into force on. (a) 1 Sept 2016 (b) 15 Jan 2013 (c) 24 Jan 2020 (d) 1 Apr 2021.
  • Q15. Obligor is defined in s.2(1). (a) clause (o) (b) clause (t) (c) clause (q) (d) clause (r)
  • Q16. Minimum notice before the first sale of immovable property is. (a) 15 days (b) 30 days (c) 45 days (d) 60 days.
  • Q17. The Magistrate under s.14 should pass the order within. (a) 15 days, extendable to 30 (b) 30 days, extendable to 60 (c) 60 days, extendable to 90 (d) no limit.
  • Q18. A caveat under s.18C lapses after. (a) 30 days (b) 60 days (c) 90 days (d) 120 days.
  • Q19. The IBC s.14 moratorium does not protect a personal guarantor, held in. (a) Lalit Kumar Jain (b) V. Ramakrishnan (c) Bajarang Agarwal (d) M.D. Frozen Foods.
  • Q20. The auction purchaser's immediate deposit under Rule 9(3) is. (a) 10% (b) 15% (c) 25% (d) 50%.

Answer key

Figure 1: Answer key

3. Explanations

  • Q1 to Q4. s.17(1), 45 days; s.13(9), 60%; s.18, 50% reducible to 25%; s.31(j), 20% (Topics 35, 24, 39, 5)
  • Q5 to Q8. s.31(i); s.13(2), 60 days; s.13(8) as amended in 2016 and Celir (2023); old s.17(2) deposit (Topics 99, 26, 30, 7)
  • Q9 to Q12. Pandurang (2020), Entry 45; Phoenix ARC (2022); Kanaiyalal Sachdev (2011); Hindon Forge (2019) (Topics 58, 66, 57, 56)
  • Q13 to Q16. 2021 notification, Rs 20 lakh; 24 January 2020; s.2(1)(q); Rules 8(6) and 9(1) (Topics 48, 49, 87, 25)
  • Q17 to Q20. s.14 proviso (2016), directory; s.18C, 90 days; V. Ramakrishnan (2018); Rule 9(3), 25% (Topics 29, 93, 78, 61)

4. Related Topics

  • Topic 85: SARFAESI Time Limits. The periods behind Questions 1, 6, 16 and 17.
  • Topic 86: Thresholds and Percentages. The figures behind Questions 2 to 4, 13 and 20.