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

After a liquidation order against Kaveri Textiles Ltd, the resolution professional Mr. Iyer fails to submit the written consent required to act as liquidator. What follows under the Code?

The Adjudicating Authority replaces him. Failure to submit written consent is a ground for replacement under section 34(4)(c), and the Authority may direct the Board to propose another insolvency professional to be appointed as liquidator under section 34(5).

  1. AThe Adjudicating Authority replaces him and may direct the Board to propose another insolvency professionalCorrect
  2. BHe continues as liquidator because consent is only a formality
  3. CThe erstwhile board of directors resumes management until a new professional is found
  4. DThe committee of creditors appoints a liquidator within seven days

Explanation

Section 34(4)(c) requires the Adjudicating Authority to replace a resolution professional who fails to submit written consent. Section 34(5) lets it direct the Board to propose another insolvency professional. The option on continuing is wrong because consent is a condition of acting.

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