SEBI Grade A (Legal) Test 5 — Questions & Solutions
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Under Section 12A read with Section 15HA of the SEBI Act 1992, the penalty for indulging in fraudulent and unfair trade practices relating to securities is:
aA penalty of not less than five lakh rupees which may extend to twenty-five crore rupees or three times the amount of profits made out of such practices, whichever is higher
bA fixed penalty of one lakh rupees only
cImprisonment only, with no monetary penalty
dA penalty not exceeding one crore rupees with no profit-linked component
Answer: A
Section 15HA of the SEBI Act 1992 (as amended) provides a minimum penalty of five lakh rupees extending up to twenty-five crore rupees or three times the amount of profits made out of the fraudulent/unfair practice, whichever is higher.
Under the SAST Regulations 2011, in computing the open offer price for a frequently traded share, which of the following is NOT one of the parameters expressly considered under Regulation 8?
aThe highest negotiated price per share under the agreement triggering the offer
bThe book value per share as certified by the company auditor
cThe volume-weighted average price of acquisitions during the 52 weeks preceding the public announcement
dThe volume-weighted average market price for 60 trading days preceding the public announcement
Answer: B
Regulation 8(2) of the SAST Regulations 2011 fixes the offer price as the highest of specified market and negotiated prices (such as the negotiated price, 52-week and 60-day VWAP); book value certified by the auditor is not a prescribed parameter for a frequently traded share.
Under Regulation 3 of the PIT Regulations 2015, communication of unpublished price sensitive information by an insider is prohibited except where the communication is:
aMade to a friend as a personal favour
bMade to any person willing to pay for it
cIn furtherance of legitimate purposes, performance of duties or discharge of legal obligations
dMade through anonymous channels to avoid detection
Answer: C
Regulation 3(1) of the PIT Regulations 2015 prohibits an insider from communicating UPSI except where the communication is in furtherance of legitimate purposes, performance of duties, or discharge of legal obligations.
Section 11B of the SEBI Act 1992 empowers SEBI, after an inquiry, to pass which of the following kinds of orders in the interests of investors or the securities market?
aOnly to recommend prosecution to a criminal court, with no power to issue directions
bOnly to advise the Central Government to legislate
cTo award compensatory damages payable to SEBI as a fine for breach of contract
dTo issue directions, including disgorgement of an amount equivalent to the wrongful gain made or loss averted by a contravention
Answer: D
Section 11B of the SEBI Act 1992 empowers SEBI to issue directions in the interest of investors/the market, and the Explanation (inserted in 2018) expressly authorises directions for disgorgement of wrongful gains made or losses averted by contravention.
Under the SAST Regulations 2011, an acquirer who already holds 30% of the voting rights in a target company acquires a further 4% of voting rights within a financial year through market purchases. Which of the following is correct?
aNo open offer is triggered as a holder between 25% and the maximum permissible non-public shareholding may acquire up to 5% in a financial year without triggering an offer
bNo open offer is triggered because the acquirer remains below the 26% initial threshold
cAn open offer is triggered as the acquisition exceeds the 5% creeping acquisition limit
dAn open offer is mandatory because any acquisition above 25% always triggers an offer
Answer: A
Regulation 3(2) of SAST 2011 permits an acquirer holding 25% or more to creep up to 5% of voting rights in a financial year without an open offer; a 4% acquisition is within this limit. (Reg. 3(2), SAST 2011)
In SEBI v. Pan Asia Advisors Ltd. (2015), the Supreme Court considered SEBI's jurisdiction over GDR (Global Depository Receipt) manipulation by a foreign entity. The Court held that:
aSEBI has no jurisdiction over GDRs as they are issued and traded outside India
bSEBI can exercise jurisdiction where the manipulative acts have an adverse effect on Indian securities markets, applying the effects doctrine
cSEBI's jurisdiction is limited only to entities registered as intermediaries in India
dOnly the RBI, not SEBI, can regulate GDR transactions
Answer: B
In SEBI v. Pan Asia Advisors Ltd. (2015), the Supreme Court upheld SEBI's extra-territorial jurisdiction where the fraudulent GDR scheme had an impact on Indian securities and shareholders, applying the effects doctrine under the SEBI Act.
Under the PIT Regulations 2015, which of the following best describes the defence available to a connected person against a charge of insider trading on the basis of "trading plans"?
aA trading plan may be executed immediately after it is approved by the compliance officer
bTrading plans are available only to designated persons who are not connected persons
cA trading plan, once approved and disclosed, must entail trading commencing only after a cooling-off period and cannot be deviated from except in limited circumstances
dA trading plan can be cancelled at will by the insider after seeing the price movement
Answer: C
Regulation 5 of PIT 2015 provides the trading-plan defence: the plan must be approved by the compliance officer, publicly disclosed, observe a cooling-off period before commencement, and is irrevocable once implemented (subject to narrow exceptions). (Reg. 5, PIT 2015)
Under Section 15T of the SEBI Act 1992, an appeal against an order of the Securities Appellate Tribunal lies to:
aThe High Court within whose jurisdiction the appellant resides, on any question
bThe Central Government acting as the final appellate authority
cA full bench of SEBI's Whole Time Members
dThe Supreme Court, only on a question of law arising out of the SAT order, within 60 days
Answer: D
Section 15Z of the SEBI Act provides that an appeal from a SAT order lies to the Supreme Court only on a question of law, within sixty days (extendable by a further sixty days). (Sec. 15Z, SEBI Act 1992)
A company's securities are held in dematerialised form. A dispute arises as to who is the registered owner vis-à-vis the depository and the beneficial owner. Under the Depositories Act 1996, which statement is correct?
aThe depository is the registered owner and the beneficial owner is entitled to all rights and benefits of the securities
bThe depository is both the registered owner and entitled to all the economic benefits of the securities
cThe beneficial owner is the registered owner for all purposes
dThe issuer company directly remains the registered owner despite dematerialisation
Answer: A
Section 10 of the Depositories Act 1996 makes the depository the registered owner for the purpose of effecting transfer, while the beneficial owner is entitled to all the rights and benefits and is subject to all the liabilities in respect of the securities. (Sec. 10, Depositories Act 1996)
Which of the following is an essential feature of a "spot delivery contract" as defined under Section 2(i) of the Securities Contracts (Regulation) Act 1956?
aDelivery and payment may be deferred up to the settlement cycle prescribed by the exchange
bActual delivery of securities and payment of price must be made on the same day or the next day at the latest
cIt must necessarily be executed on a recognised stock exchange
dIt permits delivery within fourteen days of the contract
Answer: B
Section 2(i) of the SCRA defines a spot delivery contract as one providing for actual delivery of securities and payment of price either on the same day as the date of the contract or on the next day. (Sec. 2(i), SCRA 1956)
An entity places large buy orders shortly before market close with no intention of taking delivery, and cancels them after artificially raising the closing price; this is repeated over several days. Under the PFUTP Regulations 2003, this conduct most precisely amounts to:
aA legitimate hedging strategy not covered by the regulations
bMere speculation, which is permitted on a recognised exchange
cA manipulative/fraudulent device of creating artificial volume and price (marking the close), prohibited under Regulations 3 and 4
dA technical violation actionable only under the Companies Act, not SEBI law
Answer: C
Regulations 3 and 4 of PFUTP 2003 prohibit manipulative and fraudulent practices including creating false or misleading appearance of trading and influencing prices through artificial transactions such as marking the close. (Regs. 3 & 4, PFUTP 2003)
Under the SAST Regulations 2011, the price payable in a mandatory open offer for a frequently traded share must NOT be less than the highest of several parameters. Which of the following is one such parameter?
aThe face value of the shares as stated in the memorandum of association
bThe lowest price at which the acquirer purchased shares in the preceding twelve months
cThe book value per share as per the last audited balance sheet only
dThe volume-weighted average market price of the shares for sixty trading days preceding the date of the public announcement
Answer: D
Regulation 8(2) of SAST 2011 fixes the minimum open-offer price for a frequently traded share as the highest of, inter alia, the negotiated price, the highest acquisition price in the 52 weeks before the PA, and the volume-weighted average market price for sixty trading days before the PA. (Reg. 8(2), SAST 2011)
Under the PIT Regulations 2015, the definition of "insider" includes a connected person and a person in possession of unpublished price sensitive information. With regard to a "connected person", the burden of proof concerning possession of UPSI operates as follows:
aOnce a person is shown to be a connected person, there is a presumption that they were in possession of UPSI, and the onus shifts to that person to prove otherwise
bSEBI must always positively prove the connected person actually possessed and used the UPSI
cA connected person can never be held liable unless they are also a director of the company
dThe presumption of possession applies only to immediate relatives and not to professional connections
Answer: A
Under the definition of "connected person" in Regulation 2(1)(d) read with the scheme of PIT 2015, a connected person is presumed to be in possession of UPSI, and the burden shifts to that person to rebut the presumption. (Reg. 2(1)(d), PIT 2015)
Section 11B of the SEBI Act 1992 empowers SEBI to issue directions in the interest of investors or the securities market. Following the 2002 amendment and subsequent decisions, which of the following directions can SEBI issue under this power?
aOnly advisory directions with no power to order disgorgement of unlawful gains
bDirections including disgorgement of wrongful gains made through violation of securities laws, in addition to remedial directions
cDirections to prosecute offenders in criminal courts directly without filing a complaint
dDirections that bind only registered intermediaries and not other persons
Answer: B
Section 11B (with the Explanation inserted by amendment) empowers SEBI to direct disgorgement of an amount equivalent to the wrongful gain made or loss averted by contravention, in addition to other remedial directions. (Sec. 11B, SEBI Act 1992)
An operational creditor sends a demand notice to a corporate debtor under Section 8 of the Insolvency and Bankruptcy Code, 2016. The corporate debtor, before the notice, had genuinely disputed the quality of goods in correspondence. The operational creditor files a Section 9 application. How should the Adjudicating Authority treat it?
aAdmit the application, since existence of a dispute is irrelevant for operational creditors
bAdmit it, but only after appointing an interim resolution professional to verify the dispute
cReject the application, as a pre-existing genuine dispute bars admission
dRefer the parties to arbitration before deciding admission
Answer: C
Per Mobilox Innovations v. Kirusa Software, an operational creditor's Section 9 application must be rejected if there is a pre-existing dispute that is genuine and not spurious, raised before the demand notice.
After admission of a corporate insolvency resolution process, a creditor seeks to recover dues by filing a fresh civil suit and the corporate debtor's promoter tries to transfer an asset. Which provision of the IBC, 2016 prevents both actions during the resolution process?
aSection 29A — ineligibility of resolution applicants
bSection 53 — waterfall of distribution
cSection 7 — initiation by financial creditor
dSection 14 — moratorium
Answer: D
Section 14 imposes a moratorium upon admission, prohibiting institution/continuation of suits and any transfer or disposal of the corporate debtor's assets during the CIRP.
A resolution plan is approved by the committee of creditors and challenged by a dissenting financial creditor who argues that the plan gives him less than secured operational creditors. On the priority of distribution under a resolution plan and in liquidation, which proposition is correct under the IBC, 2016?
aUnder Section 53, the CIRP cost and workmen's dues/secured creditors' debts rank above unsecured financial creditors and government dues
cWorkmen's dues for 24 months rank below government dues in liquidation
dAll creditors rank pari passu without any priority
Answer: A
Section 53's waterfall places insolvency resolution/liquidation costs first, then workmen's dues (24 months) and secured creditors, ranking them above unsecured financial creditors and government dues.
A promoter whose account had been classified as a non-performing asset for over a year, and who has not cleared the overdue amounts, submits a resolution plan for the same corporate debtor undergoing CIRP. Under the IBC, 2016, the plan is liable to be rejected because of which provision?
aSection 12 — time limit for completion of CIRP
bSection 29A — disqualification of certain persons from being resolution applicants
cSection 30(2) — feasibility and viability check only
dSection 31 — approval by the Adjudicating Authority
Answer: B
Section 29A disqualifies, among others, a person whose account has been classified as an NPA for one year or more (and who has not paid the overdue amounts) from submitting a resolution plan.
A financial creditor files an application under Section 7 of the IBC, 2016 alleging a default of Rs. 80 lakh. The corporate debtor contends the threshold for triggering CIRP is not met. As per the minimum default threshold notified under Section 4 (post the 2020 enhancement), which is correct?
aThe threshold is Rs. 1 lakh, so the application is maintainable
bThere is no minimum threshold for financial creditors
cThe threshold is Rs. 1 crore, so the default of Rs. 80 lakh is below the threshold
dThe threshold is Rs. 50 lakh, so the application is maintainable
Answer: C
By the March 2020 notification under Section 4, the minimum default for triggering CIRP was raised from Rs. 1 lakh to Rs. 1 crore; a default of Rs. 80 lakh falls below this threshold.
A private company defaults on a fixed deposit and the National Company Law Tribunal finds that the business of the company has been carried on with intent to defraud creditors. Under the Companies Act, 2013, against whom can the Tribunal direct personal liability without any limitation of liability for the company's debts?
aOnly the statutory auditor of the company
bOnly the registered shareholders holding more than 10% equity
cOnly the independent directors on the Board
dAny person who was knowingly a party to carrying on the business in such fraudulent manner
Answer: D
Section 339 (fraudulent conduct of business) empowers the Tribunal to hold persons who were knowingly parties to carrying on the business with intent to defraud creditors personally responsible, without limitation of liability, for the debts of the company.
Under the Insolvency and Bankruptcy Code, 2016, after the commencement of the corporate insolvency resolution process, which of the following is NOT prohibited by the moratorium under Section 14?
aSupply of essential goods or services to the corporate debtor
bInstitution of suits or continuation of pending suits against the corporate debtor
cRecovering any property occupied by the corporate debtor by an owner or lessor
dEnforcement of any security interest by a secured creditor
Answer: A
Section 14(2) of the IBC expressly provides that the supply of essential goods or services to the corporate debtor shall not be terminated, suspended or interrupted during the moratorium; the other three actions are barred by Section 14(1).
In Swiss Ribbons Pvt. Ltd. v. Union of India (2019), the Supreme Court upheld the constitutional validity of the IBC. With respect to the classification between financial creditors and operational creditors, the Court held that:
aThe classification is arbitrary and violates Article 14
bThe differentiation has an intelligible differentia having a rational relation to the object of the Code and is therefore valid
cOperational creditors must mandatorily be given voting rights in the Committee of Creditors
dBoth classes of creditors must be treated identically in the resolution plan
Answer: B
In Swiss Ribbons v. Union of India, (2019) 4 SCC 17, the Supreme Court held that the distinction between financial and operational creditors rests on an intelligible differentia bearing a rational nexus to the Code's objects, and is not violative of Article 14.
Under the Limited Liability Partnership Act, 2008, a partner of an LLP is personally liable for a wrongful act or omission. Which of the following correctly states the position regarding such liability?
aEvery partner is jointly and severally liable for all obligations of the LLP regardless of fault
bNo partner can ever be held personally liable as the LLP has limited liability
cA partner is personally liable for his own wrongful act or omission, but is not personally liable for the wrongful acts of another partner
dA partner is liable only to the extent of his agreed capital contribution in all circumstances
Answer: C
Section 28 of the LLP Act, 2008 provides that a partner is not personally liable for the wrongful act or omission of any other partner, while Section 27 read with the scheme makes a partner personally liable for his own wrongful act or omission committed in the course of LLP business.
A company proposes to give a loan to another body corporate. Under Section 185 of the Companies Act, 2013 (as amended), which of the following loans to a director-connected entity is permissible subject to passing a special resolution and end-use conditions?
aA loan to a director of the company in his individual capacity for personal expenditure
bA loan to a partnership firm in which the director is a partner, in all cases without any conditions
cA loan to a private company in which the director is a member, with no resolution required at all
dA loan to any person in whom a director is interested, provided a special resolution is passed and the loan is utilised for the borrowing company's principal business activities
Answer: D
The amended Section 185(2) permits a company to advance a loan to any person in whom a director is interested if a special resolution is passed in general meeting and the loans are utilised by the borrowing entity for its principal business activities; direct loans to a director under Section 185(1) remain prohibited.
Q25Constitution of India
The President seeks to promulgate an Ordinance under Article 123 while both Houses of Parliament are in session. Which statement is correct?
aAn Ordinance may be promulgated only when at least one House is not in session and the President is satisfied that immediate action is necessary
bThe President can promulgate an Ordinance at any time regardless of whether the Houses are in session
cAn Ordinance requires prior approval of the Speaker before promulgation
dAn Ordinance can be promulgated only when both Houses are dissolved
Answer: A
Article 123 permits an Ordinance only when both Houses are not in session (i.e., at least one House is not sitting) and the President is satisfied that circumstances require immediate action; re-promulgation to bypass the legislature was struck down in Krishna Kumar Singh (2017).
Q26Constitution of India
A Money Bill is passed by the Lok Sabha and transmitted to the Rajya Sabha. The Rajya Sabha does not return it with its recommendations. After what period is the Bill deemed to have been passed by both Houses?
a7 days
b14 days
c30 days
d6 months
Answer: B
Under Article 109(5), if the Rajya Sabha does not return a Money Bill within fourteen days of receipt, it is deemed to have been passed by both Houses at the expiry of that period in the form passed by the Lok Sabha.
Q27Constitution of India
A citizen claims that his right to privacy has been violated by State surveillance. Under which provision and authority is the right to privacy recognised as a fundamental right?
aArticle 19(1)(a) only, as held in Romesh Thappar
bArticle 14 only, as held in E.P. Royappa
cArticle 21 read with Part III, as held by a nine-judge bench in K.S. Puttaswamy (2017)
dIt is only a statutory right under the IT Act, not a fundamental right
Answer: C
In K.S. Puttaswamy v. Union of India (2017) a nine-judge bench unanimously held that the right to privacy is a fundamental right protected intrinsically under Article 21 and as part of the freedoms in Part III.
Q28Constitution of India
Parliament seeks to amend a provision dealing with the election of the President. Which procedure under Article 368 applies?
aSimple majority of members present and voting in each House
bSpecial majority of each House only, with no State ratification required
cSpecial majority plus ratification by all the States
dSpecial majority of each House plus ratification by the legislatures of not less than one-half of the States
Answer: D
Amendments to the manner of election of the President (Articles 54, 55) fall within the proviso to Article 368(2), requiring special majority in each House and ratification by at least one-half of the State legislatures.
Q29Constitution of India
A High Court issues a writ. Which writ lies to question the legal authority of a person holding a public office and to oust a usurper from such office?
aQuo warranto
bMandamus
cCertiorari
dProhibition
Answer: A
A writ of quo warranto under Articles 32/226 is issued to inquire into the legality of a person's claim to a public office of a substantive character and to oust a usurper; it cannot be claimed for private offices.
Q30Constitution of India
A State legislature enacts a law on a matter in the Concurrent List that conflicts with an existing Parliamentary law. The State law had received the President's assent. Which statement is correct?
aThe State law is void to the extent of repugnancy in all circumstances
bThe State law prevails in that State because it received Presidential assent under Article 254(2), notwithstanding the repugnancy
cPresidential assent is irrelevant; the central law always prevails
dBoth laws operate concurrently with no question of repugnancy
Answer: B
Under Article 254(2), a State law on a Concurrent List matter that is repugnant to an earlier Union law prevails in that State if it has received the President's assent; however, Parliament may later add to, amend or repeal such State law.
Q31Constitution of India
During a proclamation of Emergency under Article 352, the President suspends the right to move courts for enforcement of fundamental rights. Which rights can never be suspended even during such an order under Article 359?
aArticles 19 and 31
bArticles 14 and 16
cArticles 20 and 21
dArticles 25 and 26
Answer: C
After the 44th Amendment, Article 359 expressly bars suspension of the enforcement of Articles 20 and 21 even during an Emergency, overruling the majority view in ADM Jabalpur (1976).
Q32Constitution of India
A law is challenged as violating the basic structure of the Constitution. Which of the following has NOT been recognised by the Supreme Court as part of the basic structure?
aJudicial review
bFederal character of the Constitution
cFree and fair elections / democracy
dThe particular quantum of reservation fixed in a given statute
Answer: D
Kesavananda Bharati (1973) and later cases recognise judicial review, federalism, secularism, democracy and free elections as basic features; the specific percentage of reservation in a statute is a matter of legislative policy, not a basic-structure element.
Q33Criminal Law — Bharatiya Nyaya Sanhita 2023 & Bharatiya Nagarik Suraksha Sanhita 2023 (use NEW code sections)
Under the Bharatiya Nagarik Suraksha Sanhita, 2023, audio-video electronic means (e.g., videography) is made MANDATORY for which of the following?
aSearch and seizure operations and recording of the statement of a survivor in certain offences
bRecording of the entire trial in every sessions case
cThe accused's plea of guilty
dPronouncement of every appellate judgment
Answer: A
The BNSS mandates audio-video electronic recording of search and seizure (Section 105 BNSS) and of statements of survivors in specified offences, promoting transparency and use of forensic/technology in the criminal process.
Q34Criminal Law — Bharatiya Nyaya Sanhita 2023 & Bharatiya Nagarik Suraksha Sanhita 2023 (use NEW code sections)
Under the Bharatiya Nagarik Suraksha Sanhita, 2023, visit by a forensic expert to the scene of crime to collect forensic evidence is made compulsory for offences punishable with imprisonment of:
aThree years or more
bSeven years or more
cFive years or more
dTen years or more
Answer: B
Section 176(3) BNSS makes it mandatory, for offences punishable with imprisonment of seven years or more, that a forensic expert visits the crime scene to collect forensic evidence and record the process (with provision for mobile forensics where facilities are unavailable).
Q35Criminal Law — Bharatiya Nyaya Sanhita 2023 & Bharatiya Nagarik Suraksha Sanhita 2023 (use NEW code sections)
A, a public servant, confines Z—against whom no further proceeding is pending—for an extra two hours in custody, threatening continued illegal detention unless Z pays him money. Z, fearing further confinement, hands over the money. Which provision of the BNS most precisely covers A's act of confining Z in order to extract the money?
aExtortion under Section 308 BNS only
bCriminal intimidation under Section 351 BNS
cWrongful confinement to extort property or to constrain to an illegal act under Section 127(7) BNS
dSimple wrongful confinement under Section 127(2) BNS
Answer: C
Section 127(7) BNS punishes wrongful confinement done in order to extort property or valuable security, or to constrain the confined person to do something illegal; A confined Z precisely to extract money, attracting this aggravated form rather than simple confinement or plain extortion.
Q36Criminal Law — Bharatiya Nyaya Sanhita 2023 & Bharatiya Nagarik Suraksha Sanhita 2023 (use NEW code sections)
On the BNS treatment of culpable homicide, which statement correctly states the effect of grave and sudden provocation where a killing would otherwise be murder?
aIt is a general exception that wholly exonerates the accused of any homicide offence
bIt applies even where the provocation was sought or voluntarily provoked by the offender as an excuse for killing
cIt converts the offence of murder into voluntarily causing grievous hurt under Section 117 BNS
dIt is the First Exception to murder under Section 101 BNS and reduces the offence to culpable homicide not amounting to murder, punishable under Section 105 BNS
Answer: D
Grave and sudden provocation is the First Exception to murder under Section 101 BNS; when its conditions are satisfied the killing becomes culpable homicide not amounting to murder under Section 105, and the exception does not apply where the provocation is self-sought or given in the lawful exercise of a public servant's powers.
Q37Criminal Law — Bharatiya Nyaya Sanhita 2023 & Bharatiya Nagarik Suraksha Sanhita 2023 (use NEW code sections)
Which of the following is a new evidentiary safeguard for search and seizure introduced by Section 105 of the BNSS?
aThe search, seizure and preparation of the list of seized items with the witnesses' signatures must be recorded through audio-video electronic means, preferably a mobile phone
bEvery search of a closed place must be conducted only after sunrise and before sunset, without exception
cTwo female witnesses must be present for every search regardless of the place searched
dA search warrant from the Court of Session is mandatory before any seizure can be made
Answer: A
Section 105 BNSS mandates that the process of search and seizure and the preparation of the list of seized articles, along with the signing by witnesses, be recorded by audio-video electronic means, preferably a mobile phone—a safeguard absent in the old CrPC.
Q38Criminal Law — Bharatiya Nyaya Sanhita 2023 & Bharatiya Nagarik Suraksha Sanhita 2023 (use NEW code sections)
Regarding community service as a punishment newly recognised in the BNS, which statement is correct?
aIt is prescribed as an alternative to imprisonment for grievous offences such as culpable homicide
bIt can be imposed for offences such as a public servant unlawfully engaging in trade, non-appearance after a proclamation, petty theft on restoration of value, attempted suicide to compel a public servant, and public misconduct by a drunken person
cIt can be imposed only where the accused is a first-time offender below twenty-one years of age
dIt is defined in the BNS as compulsory labour in a government factory for a fixed wage
Answer: B
The BNS recognises community service as a form of punishment under Section 4(f) for specified minor offences, including a public servant unlawfully engaging in trade (Section 202), non-appearance after proclamation (Section 209), petty theft on restoration of value, attempt to commit suicide to compel or restrain a public servant (Section 226), and public misconduct by a drunken person (Section 355).
Q39Criminal Law — Bharatiya Nyaya Sanhita 2023 & Bharatiya Nagarik Suraksha Sanhita 2023 (use NEW code sections)
A is tried and acquitted of theft. Fresh facts later show that the same transaction also amounted to criminal breach of trust—a distinct offence for which a separate charge could have been framed—and these facts were not before the first court. Under the BNSS bar against double jeopardy, which is correct?
aA can never be tried again for any offence connected with the same facts once acquitted
bA may be retried for theft itself because fresh evidence has emerged
cA may be tried for criminal breach of trust, since a person acquitted of one offence may be tried for a distinct offence for which a separate charge might have been made on the same facts (Section 337 BNSS)
dA may be retried only with the prior sanction of the High Court in every such case
Answer: C
Under Section 337 BNSS (autrefois acquit/convict), a person acquitted or convicted of an offence may still be tried for a distinct offence for which a separate charge might have been made on the same facts; hence A can be tried for criminal breach of trust despite the theft acquittal.
Q40Contract & allied — Indian Contract Act 1872, Sale of Goods Act 1930, Partnership Act 1932, Specific Relief Act 1963
Under the Specific Relief Act, 1963 (as amended in 2018), with respect to specific performance of contracts the legal position now is:
aSpecific performance is an exceptional discretionary remedy granted only where damages are inadequate.
bSpecific performance can never be granted where compensation in money is claimable.
cSpecific performance is available only for contracts relating to immovable property.
dSpecific performance is generally enforceable, subject only to the limited exceptions and bars in the Act, the court's discretion having been substantially curtailed.
Answer: D
The Specific Relief (Amendment) Act, 2018 made specific performance a general rule rather than a discretionary exception, substituting Sec. 10 to make it enforceable subject to the bars in Secs. 11(2), 14 and 16.
Q41Contract & allied — Indian Contract Act 1872, Sale of Goods Act 1930, Partnership Act 1932, Specific Relief Act 1963
Under the Specific Relief Act, 1963, a person dispossessed of immovable property otherwise than in due course of law sues under Sec. 6 to recover possession. Which statement is correct?
aHe may recover possession on proof of prior possession and wrongful dispossession, without proving title; the suit must be filed within six months and no such suit lies against the Government.
bHe must prove a superior title to succeed.
cAn appeal and review lie against an order under Sec. 6.
dThe remedy is available even against the true owner who has obtained a decree of possession.
Answer: A
Section 6 of the Specific Relief Act, 1963 allows a dispossessed person to recover possession on prior possession alone without proving title, provided the suit is filed within six months of dispossession and not against the Government; no appeal or review lies from such an order.
Q42Contract & allied — Indian Contract Act 1872, Sale of Goods Act 1930, Partnership Act 1932, Specific Relief Act 1963
A advertises a reward of Rs. 500 to anyone who finds his lost dog. B, who is unaware of the advertisement, finds and returns the dog. B later learns of the reward and sues A for Rs. 500. Which of the following best states the legal position?
aB can recover the reward because the dog was actually returned
bB cannot recover because there can be no acceptance of an offer of which the acceptor had no knowledge
cB can recover because performance always constitutes acceptance regardless of knowledge
dB can recover only half the reward as quantum meruit
Answer: B
Acceptance presupposes knowledge of the offer; a person acting in ignorance of the offer cannot accept it (Lalman Shukla v. Gauri Datt, applying ss. 2(b) and 8 of the Indian Contract Act, 1872).
Q43Contract & allied — Indian Contract Act 1872, Sale of Goods Act 1930, Partnership Act 1932, Specific Relief Act 1963
Under Section 18 read with Section 23 of the Sale of Goods Act, 1930, where there is a contract for the sale of unascertained goods, when does property in the goods pass to the buyer?
aAt the moment the contract of sale is made, irrespective of ascertainment
bOnly upon physical delivery of the goods to the buyer
cWhen the goods are unconditionally appropriated to the contract by one party with the assent of the other
dOnly when the price is fully paid by the buyer
Answer: C
Section 18 bars property passing until goods are ascertained, and Section 23(1) provides that property in unascertained/future goods passes when goods of that description in a deliverable state are unconditionally appropriated to the contract with the assent of the other party.
Q44Contract & allied — Indian Contract Act 1872, Sale of Goods Act 1930, Partnership Act 1932, Specific Relief Act 1963
A partnership firm is dissolved. As between the partners, in settling accounts under Section 48 of the Indian Partnership Act, 1932, after paying outside debts, the assets are next applied to:
aDividing the residue among the partners in their profit-sharing ratio
bPaying each partner rateably what is due to him on account of capital before advances
cPaying the partner with the largest capital contribution in full first
dPaying each partner rateably what is due to him from the firm for advances as distinguished from capital
Answer: D
Section 48(b) prescribes the order: first pay the firm's debts to third parties, then pay each partner rateably for advances (loans) as distinct from capital, then rateably on account of capital, and finally divide any residue in profit-sharing proportions.
Q45Contract & allied — Indian Contract Act 1872, Sale of Goods Act 1930, Partnership Act 1932, Specific Relief Act 1963
Under the Specific Relief Act, 1963 (as amended in 2018), with respect to enforcement of contracts, which of the following is correct?
aSpecific performance is now generally enforceable as a remedy, subject only to the limited exceptions specified in the Act
bSpecific performance remains a purely discretionary remedy to be granted only in exceptional cases
cSpecific performance was abolished and replaced entirely by damages
dSpecific performance can be granted only where the subject matter is immovable property
Answer: A
The 2018 amendment recast Section 10 so that specific performance shall be enforced by the court subject to the provisions of ss. 11(2), 14 and 16, shifting it from a discretionary to a general remedy with defined exceptions.
Q46Contract & allied — Indian Contract Act 1872, Sale of Goods Act 1930, Partnership Act 1932, Specific Relief Act 1963
A contracts to sell to B a specific quantity of rice lying in a particular warehouse. Unknown to both parties, the entire stock of rice had already been destroyed by fire before the contract was made. What is the status of the contract?
aThe contract is valid and A must pay damages for non-delivery
bThe contract is void, the goods having perished before the contract was made without the seller's knowledge
cThe contract is voidable at the option of B
dThe contract is valid and B must still pay the price
Answer: B
Section 7 of the Sale of Goods Act, 1930 provides that a contract for sale of specific goods is void if, without the seller's knowledge, the goods had perished at the time the contract was made (also reflecting initial impossibility under s. 20 ICA).
Q47Code of Civil Procedure, 1908
Which of the following is the correct legal effect of an order granting a temporary injunction under Order XXXIX Rules 1 and 2 CPC?
aIt finally determines the rights of the parties to the property in dispute
bIt can be granted only after the suit has been decreed
cIt is appealable as an order under Order XLIII Rule 1(r)
dIt cannot be granted ex parte under any circumstance
Answer: C
An order under Order XXXIX Rules 1 and 2 is appealable under Order XLIII Rule 1(r); it is a discretionary interlocutory order that does not finally determine rights and may, under Rule 3, be granted ex parte in appropriate cases.
Q48Code of Civil Procedure, 1908
On the doctrine of constructive res judicata under Explanation IV to Section 11 CPC, which statement is correct?
aIt applies only when an issue was actually raised and decided in the former suit
bIt applies only to issues of law and not to issues of fact
cIt operates only between co-defendants and never between plaintiff and defendant
dAny matter which might and ought to have been made a ground of defence or attack in the former suit is deemed to have been a matter directly and substantially in issue
Answer: D
Explanation IV to Section 11 embodies constructive res judicata: any matter which might and ought to have been made a ground of attack or defence in the former suit is deemed to have been directly and substantially in issue, and cannot be reagitated.
Q49Code of Civil Procedure, 1908
A decree is passed for payment of money. The decree-holder seeks the judgment-debtor's arrest and detention in civil prison under Section 51 CPC. Such detention is permissible only where:
aThe judgment-debtor, having the means to pay, has refused or neglected to pay, or has acted in bad faith such as dishonestly transferring property
bThe decree is for any amount exceeding rupees five hundred
cThe decree-holder gives a simple undertaking to maintain the debtor
dThe decree remains unsatisfied for more than three years
Answer: A
The proviso to Section 51 requires the court to be satisfied that the judgment-debtor has or has had the means to pay and refuses or neglects (or has dishonestly transferred property), reflecting Jolly George Varghese v. Bank of Cochin (1980) that mere inability to pay does not justify detention.
Q50Code of Civil Procedure, 1908
Two persons claim entitlement to the same debt from a debtor who admits liability but is uncertain to whom payment should be made. The debtor wishes to deposit the money in court and be discharged. The appropriate procedure is:
aA suit for declaration under Section 34 of the Specific Relief Act
bAn interpleader suit under Section 88 read with Order XXXV CPC
cA representative suit under Order I Rule 8
dA reference to arbitration under Section 89
Answer: B
Where two or more persons claim adversely the same debt or property from a person who claims no interest therein except charges or costs and is ready to deliver it to the rightful claimant, an interpleader suit under Section 88 and Order XXXV is the proper remedy.
Q51Code of Civil Procedure, 1908
Regarding inherent powers of the court under Section 151 CPC, which proposition is correct?
aInherent powers can be exercised even in matters specifically covered by other provisions of the Code
bInherent powers confer substantive rights on the parties
cInherent powers are residuary and can be invoked to do justice or prevent abuse of process where no specific provision applies
dInherent powers can be used to override express statutory bars
Answer: C
Section 151 preserves the court's residuary inherent power to make orders necessary for the ends of justice or to prevent abuse of process; it cannot be invoked where the matter is expressly covered by the Code, nor to override statutory provisions.
Q52Code of Civil Procedure, 1908
A second appeal under Section 100 CPC, as amended, lies to the High Court only:
aOn any question of fact or law arising from the first appellate decree
bWhere the value of the subject-matter exceeds a prescribed pecuniary limit
cAs a matter of absolute right against every first appellate decree
dIf the High Court is satisfied that the case involves a substantial question of law, which must be formulated
Answer: D
Section 100 (post-1976 amendment) confines second appeals to cases involving a substantial question of law, which the High Court must formulate at the time of admission; questions of fact are not reagitable in second appeal.
Q53Law of Evidence — Bharatiya Sakshya Adhiniyam 2023 (use NEW code sections)
During cross-examination, the defence asks a prosecution witness about a prior inconsistent statement she made in writing to the investigating officer, intending to contradict her. Under the Bharatiya Sakshya Adhiniyam, 2023, before the writing can be used to contradict her, what must be done?
aHer attention must, before the writing is proved, be called to those parts of it that are to be used for contradicting her, under Section 148
bNothing; the writing may be used freely once produced
cThe writing must first be admitted by the witness as genuine under Section 159
dThe court's prior written permission is mandatory under Section 168
Answer: A
Section 148 BSA, 2023 (old Section 145) requires that where a witness is to be contradicted by a previous statement in writing, her attention must, before the writing is proved, be drawn to the contradicting portions.
Q54Law of Evidence — Bharatiya Sakshya Adhiniyam 2023 (use NEW code sections)
A is prosecuted for cheating. The prosecution seeks to show that A had, on three earlier occasions, defrauded others by the same modus operandi, to prove that the present act was intentional and not accidental. Under the Bharatiya Sakshya Adhiniyam, 2023, such similar-fact evidence is:
aAlways inadmissible as it shows mere bad character
bAdmissible under Section 9, as the earlier facts show the existence of intention or absence of accident
cAdmissible only if A first puts his good character in issue under Section 53
dAdmissible only as corroboration under Section 160
Answer: B
Section 9 BSA, 2023 (old Section 14) makes facts relevant when they show the existence of a state of mind such as intention or knowledge, or negate accident — similar prior frauds tend to prove the present act was intentional.
Q55Law of Evidence — Bharatiya Sakshya Adhiniyam 2023 (use NEW code sections)
In a divorce petition, the husband seeks to compel his wife to disclose a communication he made to her during the marriage. The wife objects. Under the Bharatiya Sakshya Adhiniyam, 2023, the communication is protected because:
aAll spousal testimony is barred under Section 124
bThe privilege is absolute and applies even in suits between the spouses themselves
cSpousal communications during marriage are privileged and cannot be disclosed without the maker's consent, save in suits between the spouses or where one is prosecuted for a crime against the other, under Section 128
dThe privilege ends automatically once divorce proceedings begin
Answer: C
Section 128 BSA, 2023 (old Section 122) protects communications made during marriage; the spouse cannot be compelled to disclose them without the other's consent, except in suits between the married persons or prosecutions of one spouse for a crime against the other.
Q56Law of Evidence — Bharatiya Sakshya Adhiniyam 2023 (use NEW code sections)
In a paternity dispute, it is shown that the child was born during the continuance of a valid marriage between the mother and a man, the two having access to each other at the relevant time. Under the Bharatiya Sakshya Adhiniyam, 2023, the legitimacy of the child is:
aMerely a fact the court may presume, rebuttable by a balance of probabilities
bIrrelevant unless DNA evidence is produced
cPresumed illegitimate until paternity is affirmatively proved
dConclusive proof of legitimacy, rebuttable only by proof of non-access, under Section 116
Answer: D
Section 116 BSA, 2023 (old Section 112) makes birth during a valid marriage conclusive proof of legitimacy, displaceable only by showing that the parties had no access to each other when the child could have been begotten.
Q57Law of Evidence — Bharatiya Sakshya Adhiniyam 2023 (use NEW code sections)
An accomplice in a robbery turns approver and testifies against the co-accused. The trial court convicts the co-accused solely on the uncorroborated testimony of the approver. Under the Bharatiya Sakshya Adhiniyam, 2023, the legal position regarding this conviction is best described as:
aNot illegal merely on that ground — an accomplice is a competent witness and a conviction is not illegal merely because it proceeds on uncorroborated testimony, though prudence requires corroboration
bIllegal, because an accomplice is an incompetent witness
cIllegal, because corroboration of accomplice evidence is a mandatory statutory precondition to conviction
dValid only if the approver's pardon is later withdrawn
Answer: A
An accomplice is a competent witness under Section 138 BSA, 2023 (old Section 133), and a conviction on uncorroborated accomplice testimony is not illegal; the rule of prudence in Section 119/illustration (old Section 114, Illustration (b)) makes corroboration ordinarily advisable but not a legal mandate.
Q58Administrative Law
Which of the following is the clearest example of a violation of the rule against bias (nemo judex in causa sua) on the ground of 'pecuniary bias'?
aAn adjudicator who had earlier publicly expressed strong views on the subject matter
bAn adjudicator who holds shares in a company that is a party before him, however small the holding
cAn adjudicator who is a distant relative of the complainant
dAn adjudicator who once worked in the same department as a witness
Answer: B
Pecuniary bias of any degree, however small, automatically disqualifies an adjudicator (Dimes v. Grand Junction Canal, 1852; J. Mohapatra & Co. v. State of Orissa, 1984). The others may raise personal/subject-matter bias requiring proof of real likelihood, but pecuniary interest is conclusively disqualifying.
Q59Administrative Law
The writ of certiorari and the writ of prohibition differ principally in that:
aCertiorari is preventive and prohibition is curative
bCertiorari lies only against the legislature and prohibition only against the executive
cProhibition is issued to prevent an inferior tribunal from continuing to exceed jurisdiction, while certiorari quashes a decision already made in excess of jurisdiction
dProhibition can be issued after the proceedings are concluded, certiorari only before
Answer: C
Prohibition is preventive—issued while proceedings are pending to stop a tribunal acting without/in excess of jurisdiction—whereas certiorari is corrective, quashing an order already passed (Hari Vishnu Kamath v. Ahmad Ishaque, 1955). Option (a) reverses the correct positions.
Q60Administrative Law
Under the doctrine of 'promissory estoppel' against the Government in India, which proposition is CORRECT?
aPromissory estoppel can compel the Government to act contrary to a statutory prohibition
bPromissory estoppel never applies to the Government in any circumstance
cPromissory estoppel requires the promisee to prove detriment of a monetary nature alone
dPromissory estoppel cannot be invoked against the exercise of legislative or sovereign functions, nor to defeat an express statutory provision
Answer: D
Per Motilal Padampat Sugar Mills v. State of U.P. (1979), promissory estoppel applies to the Government in its executive/administrative functions but cannot be used to compel an act prohibited by law or against legislative/sovereign functions, and the equity yields to overriding public interest.
Q61Administrative Law
Which statement correctly distinguishes 'conditional legislation' from 'delegated legislation'?
aIn conditional legislation the legislature completes the law and leaves to the executive only the determination of facts/conditions on which the law is brought into operation; in delegated legislation rule-making power is conferred on the executive
bIn conditional legislation the delegate makes the law, while in delegated legislation it merely brings the law into operation
cBoth terms are synonymous and interchangeable
dConditional legislation alone is subject to the test of excessive delegation
Answer: A
In conditional legislation the law is complete and the executive merely decides when/where it will operate upon ascertaining facts, whereas delegated legislation involves the executive actually framing rules/regulations (Hamdard Dawakhana v. Union of India, 1960).
Q62Administrative Law
The requirement that a quasi-judicial or administrative authority affecting rights must record and disclose reasons for its decision has been treated by the Supreme Court as:
aA mere discretionary courtesy with no legal consequence
bA facet of the principles of natural justice and a safeguard against arbitrariness, generally required unless expressly excluded
cRequired only where an appeal lies against the order
dNecessary only for orders passed by courts, not administrative bodies
Answer: B
In Siemens Engineering v. Union of India (1976) and Kranti Associates v. Masood Ahmed Khan (2010), the Court held recording of reasons is part of natural justice, introduces clarity and checks arbitrariness, and is generally obligatory for authorities exercising decision-making power affecting rights.
Q63Jurisprudence, Interpretation of Statutes & legal maxims
A statute lists 'cats, dogs, horses and other animals'. Applying the principle that general words following an enumeration of specific items take their colour from those items, 'other animals' would most appropriately be read to mean:
aAny living creature whatsoever, including insects and fish
bOnly the three animals already named, the general words being surplusage
cOther domesticated/kept animals of the same genus as those enumerated
dWild animals, since domestic animals are already covered
Answer: C
This is the rule of ejusdem generis: general words following specific words of a distinct genus are confined to things of the same kind, here domesticated animals; the genus 'domestic/kept animals' limits 'other animals'.
Q64Jurisprudence, Interpretation of Statutes & legal maxims
Under Salmond's analytical jurisprudence, which of the following best describes a 'right in rem'?
aA right available only against a specific, ascertained person, such as a contractual right
bA right that exists only in respect of immovable property
cA right that can be enforced only by the State and not by a private individual
dA right available against the world at large, correlating to a duty imposed on persons generally
Answer: D
A right in rem (a 'real' right) avails against persons generally and imposes a corresponding duty on the world at large, as distinguished from a right in personam which avails only against a determinate person.
Q65Jurisprudence, Interpretation of Statutes & legal maxims
A proviso is appended to the main enacting clause of a section. According to the settled rule on the function of a proviso, it should ordinarily be construed as:
aCarving out an exception from, or qualifying, the generality of the main enactment to which it is attached
bAn independent enacting provision creating rights wholly unconnected with the main section
cAlways enlarging the scope of the main provision beyond its natural meaning
dA mere explanatory note having no binding legal effect
Answer: A
The normal function of a proviso is to except or qualify something within the main enactment that would otherwise fall within it; it is not to be construed as enlarging the section's scope, per cases such as S. Sundaram Pillai v. V.R. Pattabiraman (1985) 1 SCC 591.
Q66Jurisprudence, Interpretation of Statutes & legal maxims
The maxim 'expressio unius est exclusio alterius' would be most correctly invoked where:
aA general word is followed by specific words of the same kind
bA statute expressly mentions one or more things of a class, raising an inference that things not mentioned are excluded
cThe literal meaning of a word leads to an absurd result requiring a purposive reading
dTwo provisions of the same statute appear to conflict with each other
Answer: B
Expressio unius est exclusio alterius means the express mention of one thing implies the exclusion of another; its express specification of certain matters indicates an intention to exclude those not specified, though it is a guide and not an inflexible rule.
Q67Transfer of Property Act, 1882
A condition is annexed to a transfer of property to B providing that B shall not be at liberty to sell or otherwise transfer the property to anyone at any time. Under the Transfer of Property Act, this condition is:
aValid, being a lawful condition subsequent
bValid only if the transfer is by way of lease
cVoid as an absolute restraint on alienation under Section 10, so the transfer takes effect free of the condition
dValid because parties are free to contract on any terms
Answer: C
Section 10 declares void any condition absolutely restraining the transferee from parting with or disposing of his interest in the property (subject to the lease and married-woman exceptions); the transfer takes effect as if the condition did not exist.
Q68Transfer of Property Act, 1882
A lease of immovable property for a term is determinable by forfeiture where the lessee breaks an express condition providing for re-entry. Before the lessor has determined the lease by re-entry or suit, the lessee tenders all rent due and pays costs. Which provision allows the court relief against forfeiture for non-payment of rent?
aSection 111(g) - the act of forfeiture itself terminates the lease irrevocably
bSection 108 - rights and liabilities of lessor and lessee
cSection 116 - effect of holding over
dSection 114 - relief against forfeiture for non-payment of rent, on payment of arrears, interest and costs
Answer: D
Section 114 empowers the court, in a suit for ejectment for non-payment of rent, to grant relief against forfeiture if the lessee pays or tenders the arrears of rent together with interest and costs, allowing the lessee to continue holding the property under the lease.
Q69Arbitration and Conciliation Act, 1996
Under the Fifth and Seventh Schedules read with Section 12 (as amended in 2015), which relationship renders a person ineligible to be appointed as an arbitrator?
aThe arbitrator is an employee, consultant, advisor, or has a past or present business relationship with a party
bThe arbitrator is a retired judge of any High Court
cThe arbitrator's law firm has acted for one party in an unrelated matter five years ago
dThe arbitrator has previously decided a similar legal question
Answer: A
The Seventh Schedule (made operative by Section 12(5)) lists relationships—such as being an employee, consultant, advisor of, or having a business relationship with a party—that make an arbitrator de jure ineligible, waivable only by an express written agreement after the dispute arises.
Q70Arbitration and Conciliation Act, 1996
Regarding enforcement of a foreign award under Part II (New York Convention awards), once a court is satisfied the award is enforceable, Section 49 provides that the award shall:
aBe remitted to the foreign tribunal for confirmation
bBe deemed to be a decree of that court
cRequire a separate suit for execution
dBe enforceable only after registration under the Registration Act
Answer: B
Under Section 49, where the court is satisfied that a foreign award is enforceable, the award is deemed to be a decree of that court, enabling direct execution without a separate suit.
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