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CS Professional · Insolvency and Bankruptcy - Law and Practice · Pre-Packaged Insolvency Resolution Process (Elective 7.5)

Pre-packaged process of Gupta Engineering Pvt Ltd is terminated by the Adjudicating Authority under section 54N(1). Avoidance proceedings against a preferential transaction filed by the resolution professional are pending. What must the termination order also do?

The termination order must provide for the manner in which pending avoidance transaction proceedings, and proceedings under sections 66 and 67A, will continue. Section 54N(1)(ii) requires this, so such proceedings are not automatically dismissed on termination.

  1. AAutomatically dismiss those proceedings
  2. BProvide for the manner of continuation of those proceedingsCorrect
  3. CTransfer them to the Board for disposal
  4. DLeave them to the committee of creditors to decide

Explanation

Section 54N(1)(ii) requires the order to provide for the manner of continuation of proceedings for avoidance of transactions under Chapter III, or under sections 66 and 67A. They are not dismissed automatically.

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