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CS Professional · Corporate Restructuring, Valuation and Insolvency · Pre-Packaged Insolvency Resolution Process

In a pre-packaged process for Deccan Foods Ltd, the resolution professional files a termination application under section 54D(3) on 11 May because no plan was approved in time. Within what period must the Adjudicating Authority pass its order, and who bears the process costs if it terminates the process under the general rule?

The Adjudicating Authority must pass the termination order within thirty days of the resolution professional's application, and the corporate debtor bears the pre-packaged process costs, if any, under the general rule.

  1. AWithin thirty days of the application; the corporate debtor bears the costsCorrect
  2. BWithin fourteen days of the application; the financial creditors bear the costs
  3. CWithin thirty days of the application; the resolution professional bears the costs
  4. DWithin one hundred and twenty days of the application; the corporate debtor bears the costs

Explanation

Section 54N(1) requires the Adjudicating Authority to terminate the process within thirty days of the application. Section 54N(3) says the corporate debtor bears the process costs, if any. The exception in 54N(4) concerns liquidation after an order under section 54J(2), which is not this case.

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