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CS Professional · Insolvency and Bankruptcy - Law and Practice · Introduction to Insolvency and Bankruptcy Code

A student confuses the two funds under the Code. The Insolvency and Bankruptcy Board receives fees and charges under the Code and wants to use them to pay its officers' salaries. Which is the correct analysis?

Fees and charges received by the Board are credited to the Fund of the Insolvency and Bankruptcy Board under section 222, and that Fund may be applied to salaries, allowances and remuneration of the Board's members, officers and employees. It is distinct from the section 224 Insolvency and Bankruptcy Fund.

  1. AFees go to the Insolvency and Bankruptcy Fund, administered by an administrator, and pay salaries from there
  2. BFees are credited to the Fund of the Board under section 222, which may be applied to salaries and allowances of members, officers and employeesCorrect
  3. CFees are credited to the Fund of the Board but cannot be applied to salaries, only to section 196 functions
  4. DFees must be credited to the Consolidated Fund and no separate fund applies

Explanation

Section 222(1)(a) credits grants, fees and charges received by the Board to the Board's Fund, and section 222(2)(a) allows its application to salaries, allowances and remuneration of members, officers and employees. The Fund under section 224 is distinct and is administered by an administrator appointed by the Central Government.

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