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CS Professional · Corporate Restructuring, Valuation and Insolvency · Insolvency

CIRP has been initiated against Kaveri Textiles Ltd. Under the Insolvency and Bankruptcy Code, 2016, which of the following correctly describes the function of the insolvency professional once the process has begun?

Once a process such as CIRP has been initiated, the insolvency professional must take such actions as may be necessary in the matters listed in Section 208(1). The list covers corporate and individual processes, so the function is not limited to liquidation or to individuals.

  1. ATo take such actions as may be necessary in the matters listed in the Code for that processCorrect
  2. BTo act only when the Adjudicating Authority gives a fresh direction for each step
  3. CTo take actions only in liquidation, not in resolution processes
  4. DTo perform functions only for individuals and not for corporate debtors

Explanation

Section 208(1) says that where an insolvency resolution, fresh start, liquidation or bankruptcy process has been initiated, the insolvency professional takes such actions as may be necessary in the listed matters. These include corporate insolvency resolution process under Chapter II of Part II. The other options wrongly restrict the scope of the function.

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