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CS Professional · Insolvency and Bankruptcy - Law and Practice · Bankruptcy Order for Individuals and Partnership Firms

Kiran Joshi, an undischarged bankrupt, wants to know the legal consequence of the Tribunal's discharge order for the process. Which statement about the discharge order and the status of a bankrupt is correct under the Code's definitions?

An undischarged bankrupt is one who has not yet received a discharge order under section 138. The order is passed by the Adjudicating Authority on the trustee's application, and a copy is given to the Board for recording in its register.

  1. AA discharge order under section 138 is passed by the bankruptcy trustee
  2. BAn undischarged bankrupt is a bankrupt who has not received a discharge order under section 138Correct
  3. CA copy of the discharge order goes to the debtor's creditors for recording in the register
  4. DA discharge order is passed by the Board after the trustee's application

Explanation

Section 79(22) defines an undischarged bankrupt as a bankrupt who has not received a discharge order under section 138. The Adjudicating Authority passes the order on the trustee's application, and a copy goes to the Board for recording an entry in the register under section 196. The other options misstate who passes or receives the order.

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