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

Sunrise Textiles Ltd is in liquidation. The liquidator examines a claim filed by a supplier and finds it unsupported by documents. Which step is the liquidator empowered to take under the Code before deciding on the claim?

The liquidator may require the creditor, the corporate debtor or any other person to produce any further document or evidence he thinks necessary to verify the claim, whether in whole or in part. No court decree or Committee of Creditors approval is needed for this step.

  1. ARequire the creditor, the corporate debtor or any other person to produce further documents or evidence he thinks necessary to verify the claimCorrect
  2. BDirect the creditor to obtain a court decree before the claim can be considered
  3. CAutomatically reject the claim without recording any reason
  4. DRefer the claim to the Committee of Creditors for approval

Explanation

Section 39(2) allows the liquidator to require any creditor, the corporate debtor or any other person to produce any other document or evidence he considers necessary to verify the whole or part of the claim. The Code does not require a decree or a Committee of Creditors referral. Rejection must in any case be accompanied by written reasons.

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