Total marks scored = 120x30 = 3600

Let number of students passing be x. Their average is 40.

Number of students failing is 120-x. Their average is 10.

Now, x(40) + (120-x)(10) = 3600

Solving:

40x + 1200 -10x = 3600

30x +1200 = 3600

30x = 2400

x = 2400/30 = 80

So number of students passing = 80

25% of students passing = 25/100 x 80 = 20