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CS Professional · Corporate Restructuring, Valuation and Insolvency · Cross Border Insolvency

The Central Government notifies that, for a country with which reciprocal arrangements exist, application of the IBC to a corporate debtor's assets there will be subject to specified conditions. A CIRP resolution professional later applies under Section 235 for a letter of request about assets in that country. Which statement is most accurate?

Section 234(2) permits conditions on applying the Code to assets in a reciprocating country, and Section 235 works alongside it. In CIRP, liquidation or bankruptcy, the Adjudicating Authority issues a letter of request to a competent foreign court or authority only if satisfied that evidence or action is required.

  1. AThe Section 234(2) notification can specify conditions on the application of the Code to such assets, while Section 235 lets the Adjudicating Authority issue a letter of request to a competent court or authority there if satisfied that evidence or action is requiredCorrect
  2. BSection 234(2) bars any letter of request under Section 235 once conditions are notified
  3. CSection 235 can be used only in bankruptcy proceedings of individuals, not in CIRP
  4. DThe Adjudicating Authority must issue the letter of request automatically once the RP applies

Explanation

Section 234(2) allows notified conditions on the Code's application to assets in a reciprocating country. Section 235 covers CIRP, liquidation and bankruptcy, and the Adjudicating Authority issues the letter only on being satisfied, so issuance is not automatic. Nothing in Section 234(2) bars Section 235.

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