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CS Professional · Corporate Restructuring, Valuation and Insolvency · Convening and Conduct of Meetings of Committee of Creditors

The committee of creditors approves the trustee's Section 137 report on the 120th day after the bankruptcy commencement date, before one year has passed. Which statement is correct?

Where the committee approves the report before one year from commencement, the trustee must apply for a discharge order within seven days of approval, and he stands released from his duties from the date of the committee's approval. He need not wait for the year to expire.

  1. AThe trustee must apply to the Adjudicating Authority for a discharge order within seven days of the approval, and is released from his duties from the date of approvalCorrect
  2. BThe trustee must wait until one year from commencement ends before applying for discharge
  3. CThe trustee is released only when the Adjudicating Authority passes the discharge order
  4. DThe trustee must apply for discharge within thirty days of approval

Explanation

Section 138(1)(b) requires application for a discharge order within seven days of approval where approval is obtained before the one-year period. Section 148(3) releases the trustee from the date the committee approves the report. Waiting a year is only the alternative in 138(1)(a).

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