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

After liquidation of Kaveri Forgings Pvt Ltd is ordered, the resolution professional, Ms. Iyer, does not submit the written consent required for acting as liquidator. What follows under the Code?

The Adjudicating Authority must replace her. Failure of the resolution professional to submit written consent is a ground for replacement, and the Authority may direct the Insolvency and Bankruptcy Board to propose another insolvency professional to be appointed as liquidator.

  1. AShe continues as liquidator because consent is only a formality
  2. BThe Adjudicating Authority must replace her, and may direct the Board to propose another insolvency professionalCorrect
  3. CThe company's board of directors resumes management and appoints a liquidator
  4. DThe committee of creditors appoints a liquidator by simple majority

Explanation

Section 34(4)(c) says the Adjudicating Authority shall replace the resolution professional if she fails to submit written consent. Under section 34(5) it may direct the Board to propose another professional. The board of directors cannot resume powers, since section 34(2) vests them in the liquidator.

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