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CS Professional · Insolvency and Bankruptcy - Law and Practice · Insolvency Resolution of Individuals and Partnership Firms

Under section 78 of the IBC, Part III applies to matters relating to fresh start, insolvency and bankruptcy of individuals and partnership firms where the amount of default is at least a stated minimum. What is the minimum and the permitted ceiling on any higher notified value?

Part III applies where the default is not less than one thousand rupees. The proviso to section 78 lets the Central Government notify a higher minimum default amount by notification, but that amount cannot be more than one lakh rupees.

  1. AMinimum Rs 1,000, and the Central Government may notify a higher minimum not exceeding Rs 1 lakhCorrect
  2. BMinimum Rs 1 lakh, and the Central Government may notify up to Rs 1 crore
  3. CMinimum Rs 10,000, and the ceiling is Rs 10 lakh
  4. DMinimum Rs 1,000, with no power to notify any higher amount

Explanation

Section 78 applies Part III where default is not less than one thousand rupees. The proviso lets the Central Government notify a higher minimum default value, which cannot exceed one lakh rupees.

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