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CS Professional · Insolvency and Bankruptcy - Law and Practice · Adjudication and Appeals for Corporate Persons

The NCLT passes a liquidation order under section 33 against Rudra Forgings Ltd. A shareholder, aggrieved, appeals to the NCLAT contending only that the liquidation value is lower than the fair value of the assets. Under Section 61(4), what is the position?

The appeal on that ground alone falls outside Section 61(4). An appeal against a section 33 liquidation order may be filed only on grounds of material irregularity or fraud committed in relation to the order. A mere disagreement over asset value is not such a ground.

  1. AThe appeal is maintainable on any ground the appellant chooses
  2. BThe appeal is maintainable only on the ground that the plan was not approved by the Board
  3. CThe appeal is not maintainable because liquidation orders cannot be appealed
  4. DThe appeal on that ground alone is not within Section 61(4), which permits appeal only for material irregularity or fraud in relation to the liquidation orderCorrect

Explanation

Section 61(4) limits an appeal against a section 33 liquidation order to grounds of material irregularity or fraud committed in relation to that order. A valuation disagreement alone is neither. Liquidation orders can be appealed, so the third option is wrong.

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