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CS Professional · Insolvency and Bankruptcy - Law and Practice · Introduction to Insolvency and Bankruptcy Code

The Insolvency and Bankruptcy Board needs money to pay salaries of its officers and to meet expenses of its functions under section 196. A clerk proposes drawing from the Insolvency and Bankruptcy Fund under Section 224 because it is the 'main' fund under the Code. Which view is correct?

The view is incorrect. Salaries and functional expenses of the Board are met from the Fund of the Insolvency and Bankruptcy Board under Section 222. The Section 224 Fund is a separate fund meant for insolvency resolution, liquidation and bankruptcy of persons under the Code.

  1. ACorrect, because the Section 224 Fund covers all expenses of the Board
  2. BCorrect, provided the administrator approves each salary payment
  3. CIncorrect, because the Board's salaries are met from the Fund of the Board under Section 222, not the Section 224 FundCorrect
  4. DIncorrect, because Board salaries are paid only from Central Government grants and no fund applies

Explanation

Section 222(2) applies the Board's own Fund to salaries, allowances and remuneration and to expenses of functions under section 196. The Section 224 Fund exists for insolvency resolution, liquidation and bankruptcy of persons under the Code. The two funds are separate, so the clerk's proposal is wrong.

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