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CS Professional · Corporate Restructuring, Valuation and Insolvency · Pre-Packaged Insolvency Resolution Process

A PPIRP of Narmada Polymers Ltd commenced on 10 April. No resolution plan was approved by the committee of creditors within 90 days of that date, and that period expired on 9 July. What must the resolution professional do under Section 54D?

The resolution professional must file an application with the Adjudicating Authority for termination of the PPIRP on the day after the 90-day period expires, here 10 July. Section 54D(3) requires this immediately and does not allow waiting until day 120.

  1. ASeek an extension of 90 days from the Adjudicating Authority
  2. BFile an application for termination of the PPIRP on the day after the 90-day period expiresCorrect
  3. CWait until day 120 and then file for termination
  4. DConvert the process automatically into a regular CIRP

Explanation

Section 54D(3) says that where no plan is approved within the 90-day period, the RP must, on the day after that period expires, file an application for termination. Waiting until day 120 is wrong, and Section 54D provides no extension or automatic conversion to CIRP.

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