Skip to content

CS Professional · Insolvency and Bankruptcy - Law and Practice · Adjudication and Appeals for Corporate Persons

During the liquidation of Ganga Alloys Ltd, the liquidator finds a loan taken by the company that required exorbitant payments. The NCLT, after examining an application on the transaction, is satisfied that its terms were exorbitant. Which order is NOT among the powers listed for the Adjudicating Authority in such a case?

Appointing the lender as liquidator is not a power under the extortionate credit provision. Section 51 allows the NCLT to restore the earlier position, set aside the debt, modify terms, require repayment of amounts received, or require security interest to be relinquished in favour of the liquidator or resolution professional.

  1. ASetting aside the whole or part of the debt created by the transaction
  2. BModifying the terms of the transaction
  3. CRequiring a party to repay any amount received by it
  4. DDirecting that the lender be appointed as the liquidator to recover the amountCorrect

Explanation

Section 51 lists restoring the earlier position, setting aside the debt, modifying terms, requiring repayment by a party, and requiring security interest to be relinquished in favour of the liquidator or resolution professional. Appointing the lender as liquidator is not a listed power.

Did you get it right without looking?

One question tells you little. A timed set on Adjudication and Appeals for Corporate Persons shows your real accuracy, how long you take and where you lose marks.

Practise Adjudication and Appeals for Corporate PersonsFree diagnostic mock

More Adjudication and Appeals for Corporate Persons questions