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CS Professional · Corporate Restructuring, Valuation and Insolvency · Application for Corporate Insolvency Resolution Process

The Adjudicating Authority admitted a section 7 application against Sagar Foods Ltd by order dated 10 March. Which statement correctly describes the commencement of the process and the communication of the order?

The corporate insolvency resolution process begins from the date the application is admitted, not filing. The admission order must be communicated to both the financial creditor and the corporate debtor within seven days of admission. A rejection order alone is communicated only to the financial creditor.

  1. AThe process commences on the date of filing, and the order is communicated only to the financial creditor
  2. BThe process commences from the date of admission, and the order is communicated to the financial creditor and the corporate debtor within seven daysCorrect
  3. CThe process commences when the interim resolution professional is appointed, and the order is communicated within fourteen days
  4. DThe process commences from the date of admission, and the order is communicated only to the corporate debtor

Explanation

Under section 7(6) the process commences from the date of admission. Section 7(7)(a) requires the admission order to be communicated to both the financial creditor and the corporate debtor within seven days. Only a rejection order goes solely to the financial creditor.

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