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CS Professional · Corporate Restructuring, Valuation and Insolvency · Cross Border Insolvency

Meridian Exports Ltd is in liquidation before the NCLT, Mumbai. A foreign creditor disputes the priority of its claim and separately claims against Meridian's wholly owned subsidiary situated in India. Which statement correctly reflects Section 60(5)?

The NCLT has jurisdiction over claims by or against the corporate debtor, including claims against its subsidiaries situated in India, and over any question of priorities, law or facts arising from the insolvency or liquidation proceedings. This applies notwithstanding other laws and does not exclude foreign creditors.

  1. AThe NCLT can decide questions of priority and law or fact arising from the proceedings, and claims against the Indian subsidiaries fall within its jurisdictionCorrect
  2. BThe NCLT can decide priorities only, and claims against Indian subsidiaries need a civil court
  3. CThe NCLT lacks jurisdiction over any claim by a foreign creditor
  4. DPriority questions go to the NCLAT in the first instance, while subsidiary claims go to the Debt Recovery Tribunal

Explanation

Section 60(5) gives the NCLT jurisdiction, despite any other law, over applications and claims by or against the corporate debtor, including claims by or against its subsidiaries situated in India, and over questions of priorities, law or fact arising out of the insolvency or liquidation. Nothing excludes foreign creditors.

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