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CS Professional · Insolvency and Bankruptcy - Law and Practice · Corporate Insolvency Resolution Process

Sagar Textiles Pvt Ltd, a corporate debtor, files an application under section 10 of the IBC with the Adjudicating Authority on 3 March. The application is complete and no disciplinary proceeding is pending against the proposed resolution professional. Within what period must the Adjudicating Authority pass an order, and from when does the CIRP commence?

The Adjudicating Authority must pass its order within fourteen days of receiving the section 10 application, and the CIRP commences from the date of admission of the application, not from the date of filing or from the shareholders' resolution.

  1. AWithin 14 days of receipt; CIRP commences from the date of admission of the applicationCorrect
  2. BWithin 14 days of receipt; CIRP commences from the date of filing of the application
  3. CWithin 30 days of receipt; CIRP commences from the date of admission of the application
  4. DWithin 7 days of receipt; CIRP commences from the date of the shareholders' resolution

Explanation

Under section 10(4) the Adjudicating Authority must admit or reject within fourteen days of receipt of the application. Under section 10(5) the CIRP commences from the date of admission, not filing. The option citing filing date is wrong because commencement depends on admission.

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