UPSC Prelims Practice Questions — Insolvency and Bankruptcy Code (IBC) completes 10 years

Q1. The Insolvency and Bankruptcy Code, 2016 is administered by which one of the following Union ministries?

• A. Ministry of Corporate Affairs
• B. Ministry of Finance
• C. Ministry of Law and Justice
• D. Ministry of Commerce and Industry

Q2. Consider the following statements regarding the Corporate Insolvency Resolution Process (CIRP) and the moratorium under the IBC. Which of the above is/are NOT correct?

1. The CIRP must ordinarily be completed within 180 days of the insolvency commencement date.
2. The Adjudicating Authority may grant a one-time extension of up to 90 days.
3. Including time taken in legal proceedings, the CIRP must be mandatorily completed within 330 days.
4. During the moratorium under Section 14, suppliers of essential goods and services to the corporate debtor may freely terminate such supplies.

• A. 1 and 2
• B. 4 only
• C. 3 and 4
• D. 2 only

Q3. Which one of the following is the maximum (outer) time limit within which a Corporate Insolvency Resolution Process must be mandatorily completed under the IBC, inclusive of any extension and time taken in legal proceedings?

• A. 330 days
• B. 270 days
• C. 180 days
• D. 90 days

Q4. In addition to repealing two insolvency Acts, how many existing laws did the Insolvency and Bankruptcy Code, 2016 amend?

• A. 11
• B. 2
• C. 6
• D. 22

Q5. The Insolvency and Bankruptcy Code (Amendment) Act, 2026 introduced a statutory definition of an 'avoidance transaction'. In the context of the Code, an avoidance transaction most accurately refers to:

• A. A transaction of the corporate debtor — such as a preferential, undervalued, extortionate or fraudulent transaction — which the resolution professional or liquidator may apply to have reversed
• B. A cross-border transaction of the corporate debtor that is automatically void unless cleared by the Reserve Bank of India
• C. A transaction expressly kept outside the scope of the moratorium under Section 14
• D. A related-party transaction that is automatically void under the Companies Act, 2013

Q6. The 'creditor-initiated insolvency resolution process' for specified categories of corporate debtors was introduced into the IBC framework by which one of the following enactments?

• A. The Insolvency and Bankruptcy Code (Amendment) Act, 2026
• B. The Insolvency and Bankruptcy Code (Amendment) Act, 2021
• C. The Insolvency and Bankruptcy Code (Second Amendment) Act, 2020
• D. The Insolvency and Bankruptcy Code (Amendment) Act, 2019

Q7. Under the IBC, the term 'liquidation waterfall' in Section 53 most accurately refers to which one of the following?

• A. The order of priority in which the proceeds from the sale of liquidation assets are distributed among stakeholders
• B. The valuation methodology used to fix the reserve price of the corporate debtor's assets before their sale
• C. The statutory timeline within which the liquidation of a corporate debtor must be completed
• D. The process by which a secured creditor enforces its security interest outside the liquidation estate

Q8. Under the IBC, the approval of a resolution plan by the Committee of Creditors requires an affirmative vote of financial creditors holding not less than 66% of the voting share. This voting-share requirement is prescribed under which section of the Code?

• A. Section 30(4)
• B. Section 12
• C. Section 53
• D. Section 14

Q9. Consider the following statements about the Pre-Packaged Insolvency Resolution Process (PPIRP) under the IBC. Which of the above is/are NOT correct?

1. It is available only to corporate debtors classified as Micro, Small and Medium Enterprises.
2. It is governed by Chapter III-A (Sections 54A to 58) of the Code.
3. It must ordinarily be completed within 120 days of its commencement date.
4. It can be initiated only by the financial creditors of the corporate debtor, and not by the debtor itself.

• A. 4 only
• B. 1 and 2
• C. 3 only
• D. 2 and 4