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CS Professional · Insolvency and Bankruptcy - Law and Practice · Resolution Strategies (Elective 7.5)

After the Adjudicating Authority approves the resolution plan of Aravali Cement Ltd under section 31(1), what happens under section 31(3)?

On approval of the plan, the moratorium order ceases to have effect, and the resolution professional must forward all records of the CIRP and the resolution plan to the Insolvency and Bankruptcy Board of India for recording on its database, as provided in section 31(3).

  1. AThe moratorium under section 14 continues until the plan is fully implemented, and the resolution professional destroys the records
  2. BThe moratorium ceases to have effect, and the resolution professional forwards all CIRP records and the plan to the Board to be recorded on its databaseCorrect
  3. CThe moratorium ceases only after the resolution applicant obtains all other approvals, and the records are filed with the Adjudicating Authority
  4. DThe moratorium ceases after 30 days, and the resolution professional hands the records to the new management

Explanation

Section 31(3) states that after the approval order, the section 14 moratorium ceases to have effect and the resolution professional forwards all CIRP records and the plan to the Board for recording on its database. Nothing in the text delays the end of the moratorium until other approvals are obtained.

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