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

During CIRP of Sagar Foods Ltd, the RP applies under Section 235 for evidence about assets in a reciprocating country. Which statement about the Adjudicating Authority's power is correct?

The Adjudicating Authority has a discretionary power. It may issue a letter of request to a competent court or authority of the foreign country only after being satisfied that evidence or action relating to the assets is required in connection with the insolvency resolution process.

  1. AIt must issue the letter of request on receiving the application
  2. BIt may issue the letter of request only after being satisfied that evidence or action relating to the assets is required in connection with the processCorrect
  3. CIt may issue the letter only to the Central Government, not to a foreign court
  4. DIt may issue the letter only after the resolution plan is approved

Explanation

Section 235(2) says the Adjudicating Authority, on being satisfied that evidence or action is required in connection with the process, may issue a letter of request. The power is discretionary and conditional on satisfaction, so it is not automatic. The letter goes to a court or authority of the foreign country.

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