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CS Professional · Corporate Restructuring, Valuation and Insolvency · Liquidation on or after Failing of Resolution Plan

Sundaram Textiles Ltd is in CIRP. The Adjudicating Authority did not receive any resolution plan before the maximum period permitted for completing the CIRP expired. What must the Adjudicating Authority do under the Code?

The Adjudicating Authority must pass a liquidation order, issue a public announcement that the corporate debtor is in liquidation, and send the order to the authority where the company is registered, because no resolution plan was received within the permitted CIRP period.

  1. AExtend the CIRP indefinitely until a plan is received
  2. BPass an order for liquidation, issue a public announcement that the corporate debtor is in liquidation, and send the order to the authority with which the company is registeredCorrect
  3. CDirect the promoters to take back management without any further order
  4. DRefer the matter to the Central Government for a decision on liquidation

Explanation

Under section 33(1)(a), if no resolution plan is received before the CIRP period expires, the Adjudicating Authority must order liquidation, issue a public announcement and send the order to the registering authority. Extending indefinitely or handing back management is not provided.

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