QUIZ – 2020: Insights Current Affairs Quiz, 23 April 2021

Solution: d)

Litigants are forced to approach Lok Adalats mainly because it is a party-driven process, allowing them to reach an amicable settlement. When compared to litigation, and even other dispute resolution devices, such as arbitration and mediation, Lok Adalats offer parties speed of settlement, as cases are disposed of in a single day; procedural flexibility, as there is no strict application of procedural laws such as the Code of Civil Procedure, 1908, and the Indian Evidence Act, 1872; economic affordability, as there are no court fees for placing matters before the Lok Adalat; finality of awards, as no further appeal is allowed. This prevents delays in settlement of disputes. More importantly, the award issued by a Lok Adalat, after the filing of a joint compromise petition, has the status of a civil court decree.

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Solution: a)

The Ministry of New and Renewable Energy has declared Ocean Energy as renewable energy.

The Ministry of New and Renewable Energy has clarified to all the stakeholders that energy produced using various forms of ocean energy such as tidal, wave, ocean thermal energy conversion among others shall be considered as renewable energy and shall be eligible for meeting the non-solar Renewable Purchase Obligations (RPO).

As of date, there is not any installed Ocean Energy capacity in India.

According to MNRE, the total identified potential of tidal energy is about 12,455 MW, with potential locations identified at Khambat & Kutch regions, and large backwaters, where barrage technology could be used. The total theoretical potential of wave energy in India along the country’s coast is estimated to be about 40,000 MW – these are preliminary estimates. This energy is however less intensive than what is available in more northern and southern latitudes. Ocean Thermal Energy Conversion (OTEC) has a theoretical potential of 180,000 MW in India subject to suitable technological evolution.

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Solution: b)

The central government has promulgated an ordinance allowing the use of pre-packs as an insolvency resolution mechanism for Micro, Small and Medium Enterprises (MSMEs) with defaults up to Rs 1 crore, under the Insolvency and Bankruptcy Code.

A pre-pack is the resolution of the debt of a distressed company through an agreement between secured creditors and investors instead of a public bidding process.

Under the pre-pack system, financial creditors will agree to terms with a potential investor and seek approval of the resolution plan from the National Company Law Tribunal (NCLT).

What are the benefits of pre-packs over the Corporate Insolvency Resolution Process (CIRP)?

• One of the key criticisms of the CIRP has been the time taken for resolution.  At the end of December 2020, over 86 per cent of the 1717 ongoing insolvency resolution proceedings had crossed the 270-day threshold. One of the key reasons behind delays in the CIRPs are prolonged litigations by erstwhile promoters and potential bidders.
• The pre-pack in contrast is limited to a maximum of 120 days with only 90 days available to the stakeholders to bring the resolution plan to the NCLT.
• Another key difference between pre-packs and CIRP is that the existing management retains control in the case of pre-packs while a resolution professional takes control of the debtor as a representative of financial creditors in the case of CIRP.

The pre-pack mechanism allows for a swiss challenge for any resolution plans which proved less than full recovery of dues for operational creditors. Under the swiss challenge mechanism, any third party would be permitted to submit a resolution plan for the distressed company and the original applicant would have to either match the improved resolution plan or forego the investment.

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Solution: b)

Prepaid payment instruments (PPIs) help facilitate the purchase of goods and services, including financial services, remittances and fund transfers to family and friends against the value stored on such instruments.

There are three types of PPIs—closed system PPIs, semi-closed system PPIs and open system PPIs.

Closed system PPIs and semi-closed system PPIs do not allow to make a cash withdrawal.

Open system PPIs: The most commonly used PPIs are debit and credit cards. You can make a cash withdrawal from these PPIs.

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Solution: a)

The G4 nations comprising Brazil, Germany, India, and Japan are four countries which support each other’s bids for permanent seats on the United Nations Security Council. Unlike the G7, where the common denominator is the economy and long-term political motives, the G4’s primary aim is the permanent member seats on the Security Council.