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CS Professional · Corporate Restructuring, Valuation and Insolvency · Application for Corporate Insolvency Resolution Process

Meera Logistics files a Section 9 application against Zenith Steel Ltd. On scrutiny, the Adjudicating Authority finds the application defective because a required document is missing. What must the Adjudicating Authority do before rejecting it for incompleteness?

Before rejecting a Section 9 application as incomplete, the Adjudicating Authority must give the applicant notice to rectify the defect within seven days of receiving that notice. Only if the defect is not cured may it reject the application.

  1. AGive notice to the applicant to rectify the defect within seven days of receipt of the noticeCorrect
  2. BReject immediately since incompleteness is a ground for rejection
  3. CGive the corporate debtor fourteen days to cure the defect
  4. DConvert it into an application under Section 7

Explanation

The proviso to Section 9(5) requires the Adjudicating Authority, before rejecting under clause (ii)(a) for incompleteness, to give notice to the applicant to rectify the defect within seven days of receipt of that notice. Immediate rejection is therefore wrong.

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