4. With reference to the Insolvency and Bankruptcy Code (IBC), consider the following statements.
1. Insolvency is a situation where individuals or companies are unable to repay their outstanding debt.
2. The minimum amount of default after which the creditor or debtor could apply for insolvency is ₹1 lakh.
3. The Debt Recovery Tribunal adjudicates insolvency resolutions for individuals and partnership firms.
4. Amendments to IBC mandate a deadline for the completion of the resolution process within
330 days.

Answer: C
Explanation:
● Statement 1 is correct: Insolvency is a situation where individuals or companies are
unable to repay their outstanding debt.
● The Insolvency and Bankruptcy Code (IBC) provides a time-bound process for resolving the
insolvency of corporate debtors called the corporate insolvency resolution process
(CIRP).
● Statement 2 is incorrect: Earlier, the minimum amount of default after which the
creditor or debtor could apply for insolvency was ₹1 lakh, but considering the stress on
companies amid the covid pandemic, the government increased the minimum amount to ₹1
crore.
● Under CIRP, a committee of creditors is constituted to decide on the insolvency resolution.
The committee may consider a resolution plan which typically provides for the payoff of
debt by merger, acquisition, or restructuring of the company.
● If a resolution plan is not approved by the committee of creditors within the specified time,
the company is liquidated (the assets of the borrower will be sold to repay creditors).
● During CIRP, the affairs of the company are managed by the Resolution Professional (RP),
who is appointed to conduct CIRP.
● Statement 3 is correct: The National Company Law Tribunal (NCLT) adjudicates
insolvency resolutions for companies and Limited Liability Partnerships.  The Debt
Recovery Tribunal (DRT) adjudicates insolvency resolution for individuals and
partnership firms.
● The Insolvency and Bankruptcy Board of India (IBBI) regulates the functioning of IPs,
IPAs and IUs.
● Statement 4 is correct: The code was amended in 2019 which mandated a deadline for the
completion of the resolution process within 330 days, including all litigation and
judicial processes. 
Insolvency and Bankruptcy Code (Amendment) Act, 2021
● In 2021, the Parliament passed the Insolvency and Bankruptcy Code (Amendment) Act,
2021 to expedite and provide an efficient alternate insolvency resolution process for
corporate persons classified as micro, small and medium enterprises (MSMEs) under
IBC.
Highlights of the Act

Pre-packaged insolvency resolution
● The Act introduces an alternate insolvency resolution process for MSMEs, called the
pre-packaged insolvency resolution process (PIRP).
● Unlike CIRP, PIRP may be initiated only by debtors. The debtor should have a base
resolution plan in place.
● During PIRP, the management of the company will remain with the debtor.
Minimum default amount
● Application for initiating PIRP may be filed in the event of a default of at least one lakh rupees. Debtors eligible for PIRP
● PIRP may be initiated in the event of a default by a corporate debtor classified as an MSME under the MSME Development Act, 2006.
○ Currently, under the 2006 Act, an enterprise with an annual turnover of up to Rs 250 crore, and investment in plant and machinery or equipment up to Rs 50
crore, is classified as an MSME.

5. Consider the following statements.
1. Foreign Direct Investment (FDI) is a source of capital in the primary market.
2. Foreign Portfolio Investment (FPI) is considered to be more stable than FDI.
3. A major differentiating factor between FDI and FPI is that FPI has the element of control in which investors actively manage and influence a foreign firm’s operations.

Answer: A
Explanation:
FDI
● Foreign Direct Investment (FDI) is the investment made by a person or a company in
one country into businesses located in another country.
● Generally, FDI takes place when an investor establishes foreign business operations or
acquires foreign business assets.
● FDI is an investment made in the form of equity capital, reinvested earnings or other
direct capital by setting up an enterprise.
● FDI enables setting up of businesses; more businesses mean more jobs and capacity
addition.
● Statement 1 is correct: In other words, FDI is a source of capital in the primary market and
this capital gets converted into goods and services.
● Statement 3 is incorrect: The key to foreign direct investment is the element of control.
Control represents the intent to actively manage and influence a foreign firm’s operations.
This is the major differentiating factor between FDI and a passive foreign portfolio
investment.
FPI
● Foreign Portfolio Investment (FPI) means investing in the financial assets of a foreign
country, such as stocks or bonds available on an exchange.

● FPI is often referred to as “hot money” because of its tendency to flee at the first signs of
trouble in an economy.
Why is FDI preferred?
● Statement 2 is incorrect: FDI is considered a more stable form of foreign capital
infusion as it brings in a certain expenditure that can’t be pulled out overnight.
● It creates jobs and can potentially aid economic growth.
● FPI, on the other hand, can come and go easily. Sudden withdrawal can create liquidity
problems in the securities market and hit the foreign exchange rate of the country.

1. Consider the following statements about the Prasat Ta Muen Thom archeological site recently
seen in the news.
1. The site is located in the Myanmar-Thailand border region.
2. It has Buddhist and Hindu religious shrines.

Answer: B
Soln:
● Prasat Ta Muen Thom Archaeological Site is located at the Thai-Cambodian border.
Hence, statement 1 is incorrect.
● It is a Khmer archaeological site of three buildings located nearby each other.
● It comprises the following:
○ Prasat Ta Muen, a Mahayana Buddhist religious site.
○ Prasat Ta Muen Tot was a hospital shrine of the local community. It was built in the
13th century.
○ Prasat Ta Muen Thom was built as a Hindu shrine that regarded Shiva as the
supreme deity and was assumed to have been built around the 12th century.
Hence, statement 2 is correct.

2. Consider the following statements.
1. Ocean acidification is the process by which the oceans pH level increases.
2. Ocean acidification can reduce the availability of carbonate ions, affecting the coral reefs
adversely.

Answer: B
Solution:
Ocean Acidification:
● Ocean acidification is the process by which the ocean's pH level decreases due to the
absorption of excess carbon dioxide (CO2) from the atmosphere. Hence, statement 1 is
incorrect.
● When CO2 is absorbed by seawater, a series of chemical reactions occur resulting in the
increased concentration of hydrogen ions.
● This increase causes the seawater to become more acidic and causes carbonate ions to
be relatively less abundant.

Impact of ocean acidification on marine ecosystems
● Coral Reefs: Ocean acidification can reduce the availability of carbonate ions, which are
essential for coral reef formation. This can weaken coral structures, making them more
vulnerable to erosion and damage. Hence, statement 2 is correct.
● Food Web Disruption: Changes in the abundance and distribution of calcifying organisms
can disrupt marine food webs. For example, zooplankton that rely on calcium carbonate-
based phytoplankton may be affected, impacting the entire food chain.
● Ocean Biodiversity: Ocean acidification can reduce the diversity of marine life,
particularly among species sensitive to changing pH levels. This can lead to shifts in community composition.
● Ecosystem Services: Coral reefs and other marine ecosystems provide important ecosystem services, such as coastal protection and tourism which can be immensely
affected due to ocean acidification.

3. In the joint military exercise ‘Ekuverin’, which of the following countries is associated apart from India?

Answer: C
Soln:
● The 13th edition of joint military exercise ‘Ekuverin’ between the Indian Army and the Maldives National Defence Force was recently held in Maldives. Hence, option C is correct.

4. Consider the following statements about the International Court of Justice.
1. It is the principal judicial organ of the United Nations (UN).
2. It was established by the League of Nations in 1920.
3. It has a strict mechanism to ensure compliance of its orders.

Answer: A
Soln:
International Court of Justice:
● The International Court of Justice (ICJ) is the principal judicial organ of the United
Nations (UN). It was established in 1945. Hence, statement 1 is correct.
● The court is the successor to the Permanent Court of International Justice (PCIJ)
established by the League of Nations in 1920. Hence, statement 2 is incorrect.
● After World War II, the League of Nations and PCIJ were replaced by the United Nations
and ICJ respectively.

Seat and role
● Like the PCIJ, the ICJ is based at the Peace Palace in The Hague, Netherlands.
○ It is the only one of the six principal organs of the UN that is not located in New
York City. The other five organs are the General Assembly, the Security Council, the
Economic and Social Council, the Trusteeship Council, and the Secretariat.

● The ICJ’s role is to settle legal disputes submitted to it by States and to give advisory
opinions on legal questions referred to it by United Nations organs and specialized
agencies.
● English and French are the ICJ’s official languages.
● All members of the UN are automatically parties to the ICJ statute, but this does not
automatically give the ICJ jurisdiction over disputes involving them. The ICJ gets
jurisdiction only if both parties consent to it.
● The judgment of the ICJ is final and technically binding on the parties to a case. There is
no provision of appeal; it can at the most, be subject to interpretation or, upon the
discovery of a new fact, revision.
● However, the ICJ has no way to ensure compliance of its orders, and its authority is
derived from the willingness of countries to abide by them. Hence, statement 3 is
incorrect.
Judges of the court
● The ICJ has 15 judges who are elected to nine-year terms by the UN General Assembly
and Security Council, which vote simultaneously but separately.
● A third of the court is elected every three years. Judges are eligible for re-election. Who may submit cases to the Court?
● Only States are eligible to appear before the Court in contentious cases. At present, this essentially means the 193 Member States of the United Nations.
● The Court has no jurisdiction to deal with applications from individuals, non-
governmental organizations, corporations or any other private entity.

5. Consider the following statements.
1. The Paris Principles set minimum standards of credibility for National Human Rights Institutions (NHRIs).
2. The National Human Rights Commission (NHRC) is a statutory organisation established in
1993 under the Protection of Human Rights Act (PHRA), 1993.
3. NHRC was established in conformity with the Paris Principles.

Answer: C
Soln:
Paris Principles:
● The Paris Principles ("Principles Relating to the Status of National Human Rights
Institutions") set out the minimum standards required by NHRIs to be considered
credible and to operate effectively. Hence, statement 1 is correct.
● The guidelines were developed at a United Nations meeting held in Paris in 1991, which
brought together representatives of NHRIs from all parts of the globe to define the core
attributes that all new or existing institutions should possess.
● Paris Principles require that NHRIs have independence in law, membership,
operations, policy and control of resources.
● Full compliance with the Paris Principles provides NHRIs with international recognition.
National Human Rights Commission (NHRC):
● The National Human Rights Commission (NHRC) is a statutory organisation established in
1993 under the Protection of Human Rights Act (PHRA), 1993. Hence, statement 2 is
correct.
● The Act also created Human Rights Commissions at the levels of the various States.
● NHRC was established in conformity with the Paris Principles. Hence, statement 3 is
correct.
Functions of NHRC:
● The NHRC enquiries into complaints of violation of human rights or negligence in the prevention of such violation by a public servant, studies treaties and international instruments on human rights and makes recommendations for their effective implementation to the Government.
● It is responsible for spreading human rights awareness amongst the masses.
● While inquiring into complaints under the Act, the Commission shall have all the powers of a civil court.