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Consider the following statements about section 47 of the Insolvency and Bankruptcy Code, 2016 as…

Substituted section 47(1) allows "a creditor, either by itself or jointly with other creditors, a member, or a partner" to apply where a preferential transaction, an…

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Consider the following statements about section 47 of the Insolvency and Bankruptcy Code, 2016 as substituted in 2026:
(i) A creditor, alone or jointly with other creditors, a member or a partner may apply where an avoidable transaction or fraudulent or wrongful trading has not been reported by the resolution professional or liquidator.
(ii) The application may cover preferential, undervalued and extortionate credit transactions and fraudulent or wrongful trading.
(iii) If the Adjudicating Authority finds that the resolution professional or liquidator had sufficient information but did not report it, it shall direct the Board to initiate disciplinary proceedings.
(iv) Only undervalued transactions can be challenged by creditors.
Which of the statements are correct?

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Answer and explanation

Correct answer C

Substituted section 47(1) allows "a creditor, either by itself or jointly with other creditors, a member, or a partner" to apply where a preferential transaction, an undervalued transaction, an extortionate credit transaction or fraudulent or wrongful trading has not been reported. Section 47(3) requires the Authority to direct the Board to start disciplinary proceedings against a professional who had the information but did not report it. Statement (iv) describes the old section, which was limited to undervalued transactions, so "Only (i), (ii) and (iii)" are correct.

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