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

During the CIRP of Sundaram 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 of the Code. He needs evidence about that warehouse for the process. What is the correct step for him under the Code?

The resolution professional must apply to the Adjudicating Authority, stating that evidence or action relating to the foreign assets is required in the process. He cannot issue a letter of request himself; only the Adjudicating Authority, once satisfied, may do so to the foreign court or authority.

  1. AApply to the Adjudicating Authority stating that evidence or action relating to the assets abroad is requiredCorrect
  2. BDirectly issue a letter of request to the foreign court
  3. CWait for the committee of creditors to issue the letter of request
  4. DApply to the Insolvency and Bankruptcy Board of India to issue the letter of request

Explanation

Under section 235(1), the resolution professional who believes assets are in a reciprocal-arrangement country makes an application to the Adjudicating Authority. Only the Adjudicating Authority, once satisfied, may issue the letter of request under section 235(2). Issuing it directly is wrong because the power lies with the Adjudicating Authority.

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