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

In the CIRP of Bharat Polymers Ltd, the RP applies under section 235 for a letter of request regarding a plant in a reciprocating country. The Adjudicating Authority is not yet satisfied that evidence or action relating to the plant is needed for the process. What is the legal position?

The Adjudicating Authority may issue the letter of request only when it is satisfied that evidence or action relating to the foreign assets is required in connection with the insolvency resolution process. The RP's opinion alone does not bind it, and approval of a plan is not a precondition.

  1. AIt must issue the letter, as the RP's application is conclusive
  2. BIt may issue the letter only on being satisfied that evidence or action relating to the assets is required in connection with the processCorrect
  3. CIt must forward the application to the Central Government, which issues the letter
  4. DIt may issue the letter only after the resolution plan is approved

Explanation

Section 235(2) empowers the Adjudicating Authority to issue a letter of request on receiving the application and on being satisfied that evidence or action is required in connection with the process. Satisfaction is a precondition and the power is discretionary.

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