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CS Professional · Corporate Restructuring, Valuation and Insolvency · Liquidation on or after Failing of Resolution Plan

A resolution plan for Lotus Pharma Ltd was approved by the NCLT under section 31(1) on 10 March. The resolution applicant needs approvals under other laws. By when must these be obtained under section 31(4)?

The approvals must be obtained within one year from the NCLT's approval date or within the period provided in the relevant law, whichever is later. Only a plan containing a combination needs prior Competition Commission approval before the committee of creditors approves it.

  1. AWithin one year from the date of approval by the NCLT or within such period as provided in such law, whichever is laterCorrect
  2. BWithin ninety days from the date of approval by the NCLT
  3. CWithin one year from the date of approval by the NCLT or within such period as provided in such law, whichever is earlier
  4. DBefore the committee of creditors approves the plan, in all cases

Explanation

Section 31(4) requires the resolution applicant to obtain necessary approvals within one year from the NCLT approval date or within the period provided in such law, whichever is later. 'Whichever is earlier' reverses the rule. Only a combination under the Competition Act needs CCI approval before the committee of creditors approves the plan, which is not the general case.

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