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CS Professional · Insolvency and Bankruptcy - Law and Practice · Adjudication and Appeals for Corporate Persons

Orion Pumps Ltd was ordered into liquidation by the NCLT under section 33. A shareholder wants to appeal to the NCLAT, arguing only that the liquidation is commercially unwise. Under section 61, what is the position?

The appeal is confined to material irregularity or fraud committed in relation to the liquidation order under section 61(4). The section 61(3) grounds relate only to plan approvals, and a plea that liquidation is commercially unwise is not a permitted ground.

  1. AThe appeal succeeds on any ground of aggrieved status
  2. BThe appeal can be filed on the grounds listed for resolution plan approvals
  3. CThe appeal lies only on grounds of material irregularity or fraud in relation to the liquidation order, so commercial unwisdom alone is insufficientCorrect
  4. DNo appeal lies against a liquidation order

Explanation

Section 61(4) permits an appeal against a section 33 liquidation order on grounds of material irregularity or fraud committed in relation to that order. The grounds in section 61(3) apply only to approval of a plan under section 31. A bare commercial-wisdom objection is neither.

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