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

Meridian Steels Ltd is undergoing CIRP in India. Its resolution professional, CS Anand Rao, learns that the company owns a warehouse in a country with which India has made reciprocal arrangements under section 234 of the IBC. He needs evidence relating to that asset. What is the correct step under section 235?

The resolution professional must apply to the Adjudicating Authority. If it is satisfied that evidence or action on the foreign asset is needed, it may issue a letter of request to a competent court or authority of the reciprocal country. The RP cannot issue it directly.

  1. AApply to the Adjudicating Authority, which, if satisfied that evidence or action is required, may issue a letter of request to a competent court or authority of that countryCorrect
  2. BDirectly send a letter of request to the foreign court without approaching any authority in India
  3. CApply to the Insolvency and Bankruptcy Board of India, which must itself issue the letter of request
  4. DWait until the liquidation stage, because a letter of request can be issued only in liquidation

Explanation

Section 235 lets the resolution professional, liquidator or bankruptcy trustee apply to the Adjudicating Authority when assets lie in a country with reciprocal arrangements. The Adjudicating Authority, on being satisfied, may issue the letter of request. The RP cannot send it directly, and the section covers the resolution process as well as liquidation and bankruptcy.

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