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CS Professional · Insolvency and Bankruptcy - Law and Practice · Introduction to Insolvency and Bankruptcy Code

On 10 June the Board receives the Adjudicating Authority's direction concerning a proposed bankruptcy trustee, Arjun Mehta, against whom the Board finds disciplinary proceedings pending. What must the Board do, and within what time?

The Board should reject Arjun's appointment and nominate another bankruptcy trustee within ten days of receiving the direction. Section 125(2) gives the Board this choice between confirming and rejecting with a nomination, and the seven-day period binds only the Adjudicating Authority.

  1. AReject the appointment and nominate another bankruptcy trustee, within ten days of receiving the directionCorrect
  2. BConfirm Arjun anyway, within seven days of receiving the direction
  3. CReturn the matter to the debtor to propose a new trustee, with no time limit
  4. DReject the appointment and leave the Adjudicating Authority to nominate someone, within thirty days

Explanation

Section 125(2) gives the Board ten days from receiving the direction either to confirm the proposed professional or to reject and nominate another bankruptcy trustee. Here it should reject and nominate by 20 June. The seven-day limit applies to the Adjudicating Authority, not the Board.

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