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

During the liquidation of Bharat Forge Components Ltd, the liquidator believes that machinery of the company lies in a country with which reciprocal arrangements have been made under Section 234, and that evidence about it is needed. What is the correct first step under Section 235?

The liquidator must apply to the Adjudicating Authority, stating that evidence or action about the assets in the reciprocating country is required for the liquidation. Only after being satisfied can the Adjudicating Authority issue the letter of request; the liquidator cannot write to the foreign court directly.

  1. ASend a letter of request directly to the foreign court
  2. BApply to the Adjudicating Authority stating that evidence or action relating to such assets is required in connection with the liquidationCorrect
  3. CSeek a notification from the Central Government for each asset
  4. DFile a fresh application under Section 7 in the foreign country

Explanation

Under Section 235(1) the liquidator, if of the opinion that assets are in such a country, applies to the Adjudicating Authority that evidence or action is required. Only the Adjudicating Authority, once satisfied, may issue the letter of request under Section 235(2). So direct dispatch by the liquidator is wrong.

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