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CS Professional · Insolvency and Bankruptcy - Law and Practice · Cross Border Insolvency (Elective 7.5)

Meera Metals Ltd is in liquidation. The liquidator, Mr. Rao, believes assets are situated in a country with which no reciprocal arrangement has been made under section 234. He applies for a letter of request. What is the position under section 235?

The letter of request route under section 235 is available only for assets in a country with which reciprocal arrangements have been made under section 234. Liquidation is covered, but since no arrangement exists with that country, the Adjudicating Authority cannot use this mechanism.

  1. AThe Adjudicating Authority may issue the letter of request since liquidation proceedings are covered
  2. BSection 235 applies only if the country has reciprocal arrangements under section 234, so the route is not availableCorrect
  3. CThe liquidator may issue the letter himself because liquidation is covered
  4. DThe letter can be issued only during CIRP, never during liquidation

Explanation

Section 235(1) covers assets in a country with which reciprocal arrangements have been made under section 234. Liquidation is covered as a stage, so the last option is wrong, but the missing arrangement means the mechanism is unavailable.

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