Definition 1 of 1
Each year is typically divided into 2 semesters and for degrees in Engineering, students take mandatoriarly prescribed courses for the first three years (although now-a-days, some flexiablity is possible). There is some choice in the final year and typically also needs a thesies (or dessertation) for completing credits required to graduate.
Arrears are exams in subjects (or papers) that you have flunked in any semester, that you need to re-take in the following term. The worst kind are when you flunk or have arrears past 8th semester, which requires you to make humilating trips back to college to re-sit exams with your juniors.