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CS Professional · Insolvency and Bankruptcy - Law and Practice · Cross Border Insolvency (Elective 7.5)

During the CIRP of Kaveri Textiles Ltd, the resolution professional learns that the corporate debtor owns a warehouse in a foreign country with which India has made reciprocal arrangements under section 234. He needs that country's court to help obtain evidence about the warehouse. What must he do first under the Code?

The resolution professional must first apply to the Adjudicating Authority, stating that evidence or action relating to the foreign assets is needed for the process. Only the Adjudicating Authority, once satisfied, can issue a letter of request to the competent foreign court or authority.

  1. AApply to the Adjudicating Authority stating that evidence or action relating to the assets is required for the processCorrect
  2. BWrite directly to the foreign court requesting evidence
  3. CSeek approval of the Insolvency and Bankruptcy Board to issue a letter of request
  4. DWait for the committee of creditors to issue a letter of request to the foreign court

Explanation

Under section 235, the resolution professional who believes assets lie in a reciprocal-arrangement country applies to the Adjudicating Authority. Only the Adjudicating Authority, on being satisfied, may issue the letter of request. The RP cannot approach the foreign court directly.

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