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CS Professional · Insolvency and Bankruptcy - Law and Practice · Professional and Ethical Practices for Insolvency Practitioners

An insolvency professional agency's governing board is deciding on bye-laws. Against the Code, which proposed feature is consistent with the model bye-law provisions in section 196(2)?

Prescribing grounds for penalties and a fair, transparent grievance redressal mechanism fits the model bye-laws. Section 196(2) covers penalties, grievances and expulsion grounds, while enrolment requirements must be non-discriminatory, barring discrimination by religion, caste, gender or place of birth. Removing expulsion powers would also conflict with the listed matters.

  1. AAdmitting members only from one religion to preserve homogeneity
  2. BSetting a discriminatory enrolment test based on place of birth
  3. CPrescribing grounds on which penalties may be levied on members and a fair and transparent grievance redressal mechanismCorrect
  4. DExcluding any power to expel members even for serious misconduct

Explanation

Section 196(2)(h) and (i) cover grounds for penalties and a fair, transparent grievance mechanism, and (j) covers expulsion grounds. Enrolment must be non-discriminatory, meaning no discrimination on religion, caste, gender or place of birth, so options A and B fail. Option D contradicts the expulsion-grounds provision.

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