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

In the liquidation of Bharat Steels Ltd, the liquidator believes that machinery is located in a country with which India has a Section 234 reciprocal arrangement, and that evidence about it is needed. What is the correct step under Section 235?

The liquidator must apply to the Adjudicating Authority. If it is satisfied that evidence or action relating to the foreign assets is required in connection with the liquidation, it may issue a letter of request to the competent court or authority of the reciprocating country.

  1. AThe liquidator directly sends a letter of request to the foreign court
  2. BThe liquidator applies to the Adjudicating Authority, which may issue a letter of request to a competent foreign court or authority if satisfiedCorrect
  3. CThe Central Government must itself file the application before the Adjudicating Authority
  4. DThe liquidator applies to the Insolvency and Bankruptcy Board, which issues the letter of request

Explanation

Under Section 235(1) the liquidator makes an application to the Adjudicating Authority. Under Section 235(2) the Adjudicating Authority, on being satisfied that evidence or action is required, may issue the letter of request to a court or authority of that country. The liquidator therefore cannot send it directly.

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