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

Meera Traders Ltd was ordered into liquidation under section 33. A dissenting financial creditor wants to appeal to the NCLAT, arguing only that the liquidation was commercially unwise and that the company could have been revived. The order was passed 20 days ago. Which statement is correct under the quoted section 61?

The appeal is within the 30-day limit, but the ground is restricted. An appeal against a section 33 liquidation order lies only on material irregularity or fraud committed in relation to that order, so an argument that liquidation was commercially unwise does not qualify.

  1. AThe appeal succeeds, as any aggrieved person may challenge liquidation on commercial grounds
  2. BThe appeal is barred because the 30-day period has already expired
  3. CThe appeal is within time, but the ground is limited to material irregularity or fraud in relation to the liquidation order, so the commercial-unwisdom ground does not qualifyCorrect
  4. DThe appeal must instead be filed within 15 days only

Explanation

Under section 61(2) the appeal period is 30 days, so 20 days is within time. Section 61(4) limits appeals against a liquidation order passed under section 33 to material irregularity or fraud in relation to that order. Commercial unwisdom is not a listed ground. The 15 days is only the condonation limit.

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