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CS Professional · Insolvency and Bankruptcy - Law and Practice · Corporate Insolvency Resolution Process

Meghdoot Engineering Pvt Ltd files a section 10 application, but it omits the information on its books of account. The Adjudicating Authority considers the application incomplete and intends to reject it. What must the Adjudicating Authority do before rejecting it?

Before rejecting an incomplete section 10 application, the Adjudicating Authority must give the applicant notice to rectify the defects within seven days from the date of receipt of that notice. Only if the defects remain can it reject the application.

  1. AReject it at once, as incompleteness is fatal
  2. BGive notice to the applicant to rectify the defects within seven days of receipt of the noticeCorrect
  3. CGive notice allowing fourteen days to rectify the defects
  4. DRefer the application to the Board for rectification

Explanation

The proviso to section 10(4) requires the Adjudicating Authority, before rejecting, to give the applicant a notice to rectify the defects within seven days from receipt of the notice. Immediate rejection would breach this proviso. Fourteen days is the period for deciding the application, not for curing defects.

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