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CS Professional · Corporate Restructuring, Valuation and Insolvency · Liquidation on or after Failing of Resolution Plan

Liquidator Mr. Menon of Gopal Steels Ltd is considering offers for its plant. One bidder is a person who is not eligible to be a resolution applicant. Which statement is correct regarding the sale and his powers?

He may sell by public auction or private contract, subject to section 52, but must not sell to anyone ineligible to be a resolution applicant. Section 35(1)(f) and its proviso set this bar, and creditor consent cannot remove it.

  1. AHe may sell by public auction or private contract, subject to section 52, but not to a person ineligible to be a resolution applicantCorrect
  2. BHe may sell only by public auction and to anyone offering the highest price
  3. CHe may sell by private contract to any person, including an ineligible one, if creditors consent
  4. DHe cannot sell any asset without prior Adjudicating Authority approval for each sale

Explanation

Section 35(1)(f) allows sale by public auction or private contract, subject to section 52, and its proviso bars sale to a person not eligible to be a resolution applicant. Creditor consent does not override the proviso. The powers are subject to the Authority's directions, but no per-sale approval is stated.

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