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CMA Final · Corporate and Economic Laws · Inspection, Inquiry and Investigation

The Tribunal, on a reference by the Central Government in an investigation, freezes the assets of Bharat Textiles Ltd. as removal of funds is likely to prejudice creditors. What is the maximum period for which the Tribunal's order may restrain the transfer or disposal?

The Tribunal may restrain removal, transfer or disposal of the company's funds, assets or properties for a period not exceeding three years, as specified in its order, or allow it subject to conditions and restrictions it considers fit.

  1. AOne year
  2. BThree yearsCorrect
  3. CFive years
  4. DUntil the investigation report is submitted, with no outer limit

Explanation

Section 221(1) allows the Tribunal to direct that removal, transfer or disposal shall not take place for a period not exceeding three years as specified in the order, or take place subject to conditions and restrictions. One year and five years are not the statutory limit, and the period has an outer limit, so the last option is wrong.

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