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CS Professional · Corporate Restructuring, Valuation and Insolvency · Cross Border Insolvency

Alpha Textiles Ltd is undergoing CIRP in Mumbai. Its resolution professional finds that the company owns a warehouse in a foreign country. India has made no reciprocal arrangement with that country under Section 234. Can the RP seek a letter of request under Section 235 for evidence or action relating to the warehouse?

The RP cannot use Section 235 for this warehouse. The section requires that the foreign country be one with which reciprocal arrangements have been made under Section 234. Without such an arrangement, a letter of request cannot be sought, even though the process is a CIRP.

  1. AYes, because Section 235 applies notwithstanding any other law and covers every foreign country
  2. BNo, because Section 235 operates only for assets in a country with which reciprocal arrangements have been made under Section 234Correct
  3. CYes, but only if the committee of creditors approves by a majority vote
  4. DNo, because Section 235 applies only to liquidation and not to CIRP

Explanation

Section 235(1) allows the application only where assets are situated in a country outside India with which reciprocal arrangements have been made under Section 234. The non obstante clause does not remove that condition. Option D is wrong because Section 235 covers insolvency resolution process, liquidation and bankruptcy proceedings.

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