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

Kaveri Textiles Ltd is in liquidation. Liquidator Ms Nisha Iyer believes some of its assets are in Country X. India has no reciprocal arrangement under section 234 with Country X. Based on section 235, what is the position?

The liquidator cannot use the section 235 letter-of-request route for Country X. The section applies only where assets lie in a country with which India has made reciprocal arrangements under section 234. No such arrangement exists here, so the condition is not met.

  1. AThe Adjudicating Authority may still issue a letter of request, since the section applies notwithstanding any other law
  2. BThe section 235 route is available only for countries with which reciprocal arrangements have been made under section 234, so the liquidator cannot rely on it for Country XCorrect
  3. CThe liquidator may apply only if the corporate debtor's creditors unanimously consent
  4. DThe liquidator may apply only if the assets are of a personal guarantor, not the corporate debtor

Explanation

Section 235(1) refers to assets situated in a country with which reciprocal arrangements have been made under section 234. Without such an arrangement, the letter-of-request mechanism is not available. The non obstante clause does not remove this condition.

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