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

Trustee Meera Iyer has distributed the estate, and the committee of creditors approves her report on 5 May. Another creditor argues she remains in office until the Adjudicating Authority passes the discharge order. Which statement is correct under the Code?

The trustee is released from her duties from the date the committee of creditors approves her report of administration under Section 137. The later discharge order and the Board's register entry relate to the bankrupt's discharge, not to the trustee's release after completing administration.

  1. AShe is released from her duties from the date the committee approves her report under Section 137Correct
  2. BShe is released only when the Adjudicating Authority passes the discharge order
  3. CShe is released only when a new trustee is appointed
  4. DShe is released on the date the Board records the discharge in its register

Explanation

Section 148(3) provides that a trustee who has completed administration is released of her duties with effect from the date the committee of creditors approves the report under Section 137. The Adjudicating Authority order and the Board's register entry concern the bankrupt's discharge, not the trustee's release. Appointment of a new trustee relates to Section 148(1), which covers replacement, resignation or vacancy.

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