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CS Professional · Corporate Restructuring, Valuation and Insolvency · Application for Corporate Insolvency Resolution Process

Bharat Steelworks Ltd defaulted on a term loan from Western Union Bank. The bank files an application under section 7 and names a proposed interim resolution professional. Within what period must the Adjudicating Authority ascertain the existence of default from the records of an information utility or other evidence furnished?

The Adjudicating Authority must ascertain default within fourteen days of receiving the financial creditor's application, using information utility records or other evidence furnished. If it fails to do so and pass an order in that time, it must record its reasons in writing.

  1. ASeven days of receipt of the application
  2. BFourteen days of receipt of the applicationCorrect
  3. CThirty days of receipt of the application
  4. DTen days of receipt of the application

Explanation

Section 7(4) requires the Adjudicating Authority to ascertain the existence of default within fourteen days of receipt of the application. The seven-day period relates to rectifying defects and to communicating the order, so it is not the answer.

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