Skip to content

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

Sundaram Pumps Ltd contributed money to the Insolvency and Bankruptcy Fund. Later, a corporate insolvency resolution process starts against it, and it needs money to pay workmen. Which is correct?

Sundaram Pumps may apply to the Adjudicating Authority to withdraw funds from the Insolvency and Bankruptcy Fund, but only up to the amount it contributed. Permitted uses include payments to workmen, protecting assets and meeting incidental proceeding costs.

  1. AIt cannot withdraw anything, as contributions are forfeited
  2. BIt may apply to the Adjudicating Authority to withdraw funds not exceeding the amount it contributedCorrect
  3. CIt may withdraw twice its contribution on application
  4. DThe Fund administrator must pay all workmen dues of any company

Explanation

A contributor, once proceedings under the Code are initiated against it before an Adjudicating Authority, may apply for withdrawal of funds not exceeding its own contribution, for purposes such as payments to workmen, protecting assets and incidental costs. Withdrawal above the contribution is not allowed.

Did you get it right without looking?

One question tells you little. A timed set on Introduction to Insolvency and Bankruptcy Code shows your real accuracy, how long you take and where you lose marks.

Practise Introduction to Insolvency and Bankruptcy CodeFree diagnostic mock

More Introduction to Insolvency and Bankruptcy Code questions