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CS Professional · Insolvency and Bankruptcy - Law and Practice · Liquidation of Corporate Person

Gangotri Textiles Ltd was ordered into liquidation under section 33 after its CIRP failed. The resolution professional, CS Anil Mehra, has filed his written consent in the specified form with the Adjudicating Authority. What is his position on liquidation?

The resolution professional who filed written consent acts as the liquidator by default. Section 34(1) makes him the liquidator unless the Adjudicating Authority replaces him on a ground in section 34(4). No Board proposal or creditor vote is required for this default appointment.

  1. AHe acts as the liquidator unless the Adjudicating Authority replaces himCorrect
  2. BHe must wait for the Board to propose a fresh insolvency professional before acting
  3. CHe continues only as an advisor to the former board of directors
  4. DHe acts as liquidator only if the committee of creditors approves him by vote

Explanation

Under section 34(1), the resolution professional, subject to submitting written consent in the specified form, acts as the liquidator unless replaced by the Adjudicating Authority under section 34(4). No fresh Board proposal or creditor vote is needed. The Board proposes a name only if the Adjudicating Authority directs it after a replacement ground arises.

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