Liquidation Process (Sec. 33-54)

(1) Where the Adjudicating Authority, –

(a) before the expiry of the insolvency resolution process period or the maximum period permitted for completion of the

corporate insolvency resolution process under section 12 or the fast track corporate insolvency resolution process under

section 56, as the case may be, does not receive a resolution plan under sub-section (6) of section 30; or

(b) rejects the resolution plan under section 31 for the non-compliance of the requirements specified therein, it shall –

(i) pass an order requiring the corporate debtor to be liquidated in the manner as laid down in this Chapter;

(ii) issue a public announcement stating that the corporate debtor is in liquidation; and

(iii) require such order to be sent to the authority with which the corporate debtor is registered.

(2) Where the resolution professional, at any time during the corporate insolvency resolution process but before confirmation

of resolution plan, intimates the Adjudicating Authority of the decision of the committee of creditors approved by not less

than sixty-six per cent. of the voting share] to liquidate the corporate debtor, the Adjudicating Authority shall pass a

liquidation order as referred to in sub-clauses (i), (ii) and (iii) of clause (b) of sub-section (1).

Explanation. – For the purpose of this sub-section, it is hereby declared that the committee of creditors may take the decision

to liquidate the corporate debtor, any time after its constitution under sub-section (1) of section 21 and before the

confirmation of the resolution plan, including at any time before the preparation of the information memorandum.

(3) Where the resolution plan approved by the Adjudicating Authority is contravened by the concerned corporate debtor, any

person other than the corporate debtor, whose interests are prejudicially affected by such contravention, may make an

application to the Adjudicating Authority for a liquidation order as referred to in sub-clauses (i), (ii), (iii) of clause (b) sub

section (1).

(4) On receipt of an application under sub-section (3), if the Adjudicating Authority determines that the corporate debtor has

contravened the provisions of the resolution plan, it shall pass a liquidation order as referred to in sub-clauses (i), (ii) and

(iii) of clause (b) of sub-section (1).

(5) Subject to section 52, when a liquidation order has been passed, no suit or other legal proceeding shall be instituted by

or against the corporate debtor:

Provided that a suit or other legal proceeding may be instituted by the liquidator, on behalf of the corporate debtor, with the

prior approval of the Adjudicating Authority, (6) the provisions of sub-section (5) shall not apply to legal proceedings in

relation to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.

(7) The order for liquidation under this section shall be deemed to be a notice of discharge to the officers, employees and

workmen of the corporate debtor, except when the business of the corporate debtor is continued during the liquidation

process by the liquidator.

VL Note : –

Section 34 Appointment of liquidator and fee to be paid

(1) Where the Adjudicating Authority passes an order for liquidation of the corporate debtor under section 33, the resolution

professional appointed for the corporate insolvency resolution process under Chapter II shall, subject to submission of a

written consent by the resolution professional to the Adjudicatory Authority in specified form, shall act as the liquidator for

the purposes of liquidation unless replaced by the Adjudicating Authority under subsection (4).

(2) On the appointment of a liquidator under this section, all powers of the board of directors, key managerial personnel and

the partners of the corporate debtor, as the case may be, shall cease to have effect and shall be vested in the liquidator.

(3) The personnel of the corporate debtor shall extend all assistance and cooperation to the liquidator as may be required by

him in managing the affairs of the corporate debtor and provisions of section 19 shall apply in relation to voluntary liquidation

process as they apply in relation to liquidation process with the substitution of references to the liquidator for references to

the interim resolution professional.

(4) The Adjudicating Authority shall by order replace the resolution professional, if–

(a) the resolution plan submitted by the resolution professional under section 30 was rejected for failure to meet the

requirements mentioned in sub-section (2) of section 30; or

(b) the Board recommends the replacement of a resolution professional to the Adjudicating Authority for reasons to be

recorded in writing; or

(5) For the purposes of 3 [clause (a) and clause (c)] of sub-section (4), the Adjudicating Authority may direct the Board to

propose name of another insolvency professional to be appointed as a liquidator.

(6) The Board shall propose the name of another insolvency professional 4 [along with written consent from the insolvency

professional in the specified form] within ten days of the direction issued by the Adjudicating Authority under sub-section (5).

(7) The Adjudicating Authority shall, on receipt of the proposal of the Board for the appointment of an insolvency professional

as liquidator, by an order appoint such insolvency professional as the liquidator.

(8) An insolvency professional proposed to be appointed as a liquidator shall charge such fee for the conduct of the

liquidation proceedings and in such proportion to the value of the liquidation estate assets, as may be specified by the Board.

(9) The fees for the conduct of the liquidation proceedings under sub-section (8) shall be paid to the liquidator from the

proceeds of the liquidation estate under section 53.

VL Note : –

Section 35 Powers and duties of liquidator

(1) Subject to the directions of the Adjudicating Authority, the liquidator shall have the following powers and duties, namely: –

(a) to verify claims of all the creditors;

(b) to take into his custody or control all the assets, property, effects and actionable claims of the corporate debtor;

prepare a report;

(d) to take such measures to protect and preserve the assets and properties of the corporate debtor as he considers

necessary;

(e) to carry on the business of the corporate debtor for its beneficial liquidation as he considers necessary;

(f) subject to section 52, to sell the immovable and movable property and actionable claims of the corporate debtor in

liquidation by public auction or private contract, with power to transfer such property to any person or body corporate, or

to sell the same in parcels in such manner as may be specified:

Provided that the liquidator shall not sell the immovable and movable property or actionable claims of the corporate debtor in

liquidation to any person who is not eligible to be a resolution applicant.

(g) to draw, accept, make and endorse any negotiable instruments including bill of exchange, hundi or promissory note

in the name and on behalf of the corporate debtor, with the same effect with respect to the liability as if such

instruments were drawn, accepted, made or endorsed by or on behalf of the corporate debtor in the ordinary course of

its business;

(h) to take out, in his official name, letter of administration to any deceased contributory and to do in his official name

any other act necessary for obtaining payment of any money due and payable from a contributory or his estate which

cannot be ordinarily done in the name of the corporate debtor, and in all such cases, the money due and payable shall,

for the purpose of enabling the liquidator to take out the letter of administration or recover the money, be deemed to be

due to the liquidator himself;

(i) to obtain any professional assistance from any person or appoint any professional, in discharge of his duties,

obligations and responsibilities;

(j) to invite and settle claims of creditors and claimants and distribute proceeds in accordance with the provisions of this

Code;

(k) to institute or defend any suit, prosecution or other legal proceedings, civil or criminal, in the name of on behalf of

the corporate debtor; the following powers and duties, namely: –

(l) to investigate the financial affairs of the corporate debtor to determine undervalued or preferential transactions;

(m) to take all such actions, steps, or to sign, execute and verify any paper, deed, receipt document, application,

petition, affidavit, bond or instrument and for such purpose to use the common seal, if any, as may be necessary for

liquidation, distribution of assets and in discharge of his duties and obligations and functions as liquidator;

(n) to apply to the Adjudicating Authority for such orders or directions as may be necessary for the liquidation of the

corporate debtor and to report the progress of the liquidation process in a manner as may be specified by the Board;

and

(o) to perform such other functions as may be specified by the Board.

(2) The liquidator shall have the power to consult any of the stakeholders entitled to a distribution of proceeds under section

53:

Provided that any such consultation shall not be binding on the liquidator:

Provided further that the records of any such consultation shall be made available to all other stakeholders not so consulted,

in a manner specified by the Board.

VL Note : –

Section 36 Liquidation estate

(1) For the purposes of liquidation, the liquidator shall form an estate of the assets mentioned in sub-section (3), which will

be called the liquidation estate in relation to the corporate debtor.

(2) The liquidator shall hold the liquidation estate as a fiduciary for the benefit of all the creditors.

(3) Subject to sub-section (4), the liquidation estate shall comprise all liquidation estate assets which shall include the

following: –

(a) any assets over which the corporate debtor has ownership rights, including all rights and interests therein as

evidenced in the balance sheet of the corporate debtor or an information utility or records in the registry or any

depository recording securities of the corporate debtor or by any other means as may be specified by the Board,

including shares held in any subsidiary of the corporate debtor;

(b) assets that may or may not be in possession of the corporate debtor including but not limited to encumbered assets;

(d) intangible assets including but not limited to intellectual property, securities (including shares held in a subsidiary of

the corporate debtor) and financial instruments, insurance policies, contractual rights;

(e) assets subject to the determination of ownership by the court or authority; (f) any assets or their value recovered

through proceedings for avoidance of transactions in accordance with this Chapter;

(g) any asset of the corporate debtor in respect of which a secured creditor has relinquished security interest;

(h) any other property belonging to or vested in the corporate debtor at the insolvency commencement date; and

(i) all proceeds of liquidation as and when they are realised.

(4) The following shall not be included in the liquidation estate assets and shall not be used for recovery in the liquidation: –

(a) assets owned by a third party which are in possession of the corporate debtor, including –

(i) assets held in trust for any third party;

(ii) bailment contracts;

(iii) all sums due to any workmen or employee from the provident fund, the pension fund and the gratuity fund;

(iv) other contractual arrangements which do not stipulate transfer of title but only use of the assets; and

(v) such other assets as may be notified by the Central Government in consultation with any financial sector

regulator;

(b) assets in security collateral held by financial services providers and are subject to netting and set-off in multi-lateral

trading or clearing transactions;

held on account of avoidance transactions that may be avoided under this Chapter;

(d) assets of any Indian or foreign subsidiary of the corporate debtor; or

(e) any other assets as may be specified by the Board, including assets which could be subject to set-off on account of

mutual dealings between the corporate debtor and any creditor.

VL Note : –

Section 37 Powers of liquidator to access information

“(1) Notwithstanding anything contained in any other law for the time being in force, the liquidator shall have the power to

access any information systems for the purpose of admission and proof of claims and identification of the liquidation estate

assets relating to the corporate debtor from the following sources, namely: –

(a) an information utility;

(b) credit information systems regulated under any law for the time being in force;

(d) information systems for financial and non-financial liabilities regulated under any law for the time being in force;

(e) information systems for securities and assets posted as security interest regulated under any law for the time being

in force;

(f) any databases maintained by the Board; and

(g) any other source as may be specified by the Board.

(2) The creditors may require the liquidator to provide them any financial information relating to the corporate debtor in such

manner as may be specified.

(3) The liquidator shall provide information referred to in sub-section (2) to such creditors who have requested for such

information within a period of seven days from the date of such request or provide reasons for not providing such

information.

VL Note : –

Section 38 Consolidation of claims

(1) The liquidator shall receive or collect the claims of creditors within a period of thirty days from the date of the

commencement of the liquidation process.

(2) A financial creditor may submit a claim to the liquidator by providing a record of such claim with an information utility:

Provided that where the information relating to the claim is not recorded in the information utility, the financial creditor may

submit the claim in the same manner provided for the submission of claims for the operational creditor under sub-section

(3).

(3) An operational creditor may submit a claim to the liquidator in such form and in such manner and along with such

supporting documents required to prove the claim as may be specified by the Board.

(4) A creditor who is partly a financial creditor and partly an operational creditor shall submit claims to the liquidator to the

extent of his financial debt in the manner as provided in sub-section (2) and to the extent of his operational debt under sub

section (3).

(5) A creditor may withdraw or vary his claim under this section within fourteen days of its submission.

VL Note : –

Section 39 Verification of claims

(1) The liquidator shall verify the claims submitted under section 38 within such time as specified by the Board.

(2) The liquidator may require any creditor or the corporate debtor or any other person to produce any other document or

evidence which he thinks necessary for the purpose of verifying the whole or any part of the claim.

VL Note : –

Section 40 Admission or rejection of claims

(1) The liquidator may, after verification of claims under section 39, either admit or reject the claim, in whole or in part, as

the case may be:

Provided that where the liquidator rejects a claim, he shall record in writing the reasons for such rejection.

(2) The liquidator shall communicate his decision of admission or rejection of claims to the creditor and corporate debtor

within seven days of such admission or rejection of claims.

VL Note : –

Section 41 Determination of valuation of claims

The liquidator shall determine the value of claims admitted under section 40 in such manner as may be specified by the

Board.

VL Note : –

Section 42 Appeal against the decision of liquidator

A creditor may appeal to the Adjudicating Authority against the decision of the liquidator 1 [accepting or] rejecting the claims

within fourteen days of the receipt of such decision.

VL Note : –

Section 43 Preferential transactions and relevant time

(1) Where the liquidator or the resolution professional, as the case may be, is of the opinion that the corporate debtor has at

a relevant time given a preference in such transactions and in such manner as laid down in sub-section (2) to any persons as

referred to in sub-section (4), he shall apply to the Adjudicating Authority for avoidance of preferential transactions and for,

one or more of the orders referred to in section 44.

(2) A corporate debtor shall be deemed to have given a preference, if–

(a) there is a transfer of property or an interest thereof of the corporate debtor for the benefit of a creditor or a surety or

a guarantor for or on account of an antecedent financial debt or operational debt or other liabilities owed by the

corporate debtor; and

(b) the transfer under clause (a) has the effect of putting such creditor or a surety or a guarantor in a beneficial position

than it would have been in the event of a distribution of assets being made in accordance with section 53.

(3) For the purposes of sub-section (2), a preference shall not include the following transfers–

(a) transfer made in the ordinary course of the business or financial affairs of the corporate debtor or the transferee;

(b) any transfer creating a security interest in property acquired by the corporate debtor to the extent that –

(i) such security interest secures new value and was given at the time of or after the signing of a security

agreement that contains a description of such property as security interest, and was used by corporate debtor to

acquire such property; and

(ii) such transfer was registered with an information utility on or before thirty days after the corporate debtor

receives possession of such property:

Provided that any transfer made in pursuance of the order of a court shall not, preclude such transfer to be deemed as giving

of preference by the corporate debtor.

Explanation. – For the purpose of sub-section (3) of this section, “new value” means money or its worth in goods, services,

or new credit, or release by the transferee of property previously transferred to such transferee in a transaction that is

neither void nor voidable by the liquidator or the resolution professional under this Code, including proceeds of such property,

but does not include a financial debt or operational debt substituted for existing financial debt or operational debt.

(4) A preference shall be deemed to be given at a relevant time, if –

(a) It is given to a related party (other than by reason only of being an employee), during the period of two years

preceding the insolvency commencement date; or

(b) a preference is given to a person other than a related party during the period of one year preceding the insolvency

commencement date.

VL Note : –

Section 44 Orders in case of preferential transactions

(1) The Adjudicating Authority, may, on an application made by the resolution professional or liquidator under sub-section (1)

of section 43, by an order:

(a) require any property transferred in connection with the giving of the preference to be vested in the corporate debtor;

(b) require any property to be so vested if it represents the application either of the proceeds of sale of property so

transferred or of money so transferred;

(d) require any person to pay such sums in respect of benefits received by him from the corporate debtor, such sums to

the liquidator or the resolution professional, as the Adjudicating Authority may direct;

(e) direct any guarantor, whose financial debts or operational debts owed to any person were released or discharged (in

whole or in part) by the giving of the preference, to be under such new or revived financial debts or operational debts to

that person as the Adjudicating Authority deems appropriate;

(f) direct for providing security or charge on any property for the discharge of any financial debt or operational debt

under the order, and such security or charge to have the same priority as a security or charge released or discharged

wholly or in part by the giving of the preference; and

(g) direct for providing the extent to which any person whose property is so vested in the corporate debtor, or on whom

financial debts or operational debts are imposed by the order, are to be proved in the liquidation or the corporate

insolvency resolution process for financial debts or operational debts which arose from, or were released or discharged

wholly or in part by the giving of the preference:

Provided that an order under this section shall not –

(a) affect any interest in property which was acquired from a person other than the corporate debtor or any interest

derived from such interest and was acquired in good faith and for value;

(b) require a person, who received a benefit from the preferential transaction in good faith and for value to pay a sum to

the liquidator or the resolution professional.

Explanation-I: For the purpose of this section, it is clarified that where a person, who has acquired an interest in property

from another person other than the corporate debtor, or who has received a benefit from the preference or such another

person to whom the corporate debtor gave the preference, –

(a) had sufficient information of the initiation or commencement of insolvency resolution process of the corporate

debtor;

(b) is a related party, it shall be presumed that the interest was acquired, or the benefit was received otherwise than in

good faith unless the contrary is shown.

Explanation-II. – A person shall be deemed to have sufficient information or opportunity to avail such information if a public

announcement regarding the corporate insolvency resolution process has been made under section 13.

VL Note : –

Section 45 Avoidance of undervalued transactions

(1) If the liquidator or the resolution professional, as the case may be, on an examination of the transactions of the corporate

debtor referred to in sub-section (2) determines that certain transactions were made during the relevant period

under section 46, which were undervalued, he shall make an application to the Adjudicating Authority to declare such

transactions as void and reverse the effect of such transaction in accordance with this Chapter.

(2) A transaction shall be considered undervalued where the corporate debtor–

(a) makes a gift to a person; or

(b) enters into a transaction with a person which involves the transfer of one or more assets by the corporate debtor for

a consideration the value of which is significantly less than the value of the consideration provided by the corporate

debtor, and such transaction has not taken place in the ordinary course of business of the corporate debtor.

VL Note : –

Section 46 Relevant period for avoidable transactions

(1) In an application for avoiding a transaction at undervalue, the liquidator or the resolution professional, as the case may

be, shall demonstrate that –

(i) such transaction was made with any person within the period of one year preceding the insolvency commencement

date; or

(ii) such transaction was made with a related party within the period of two years preceding the insolvency

commencement date.

(2) The Adjudicating Authority may require an independent expert to assess evidence relating to the value of the transactions

mentioned in this section.

VL Note : –

Section 47 Application by creditor in cases of undervalued transactions

(1) Where an undervalued transaction has taken place and the liquidator or the resolution professional as the case may be,

has not reported it to the Adjudicating Authority, a creditor, member or a partner of a corporate debtor, as the case may be,

may make an application to the Adjudicating Authority to declare such transactions void and reverse their effect in

accordance with this Chapter.

(2) Where, the Adjudicating Authority, after examination of the application made under sub-section (1), is satisfied that –

(a) undervalued transactions had occurred; and

(b) liquidator or the resolution professional, as the case may be, after

having sufficient information or opportunity to avail information of such transactions did not report such transaction to

the Adjudicating Authority, it shall pass an order-

(a) restoring the position as it existed before such transactions and reversing the effects thereof in the manner as laid

down in section 45 and section 48;

(b) requiring the Board to initiate disciplinary proceedings against the liquidator or the resolution professional as the

case may be.

VL Note : –

Section 48 Order in cases of undervalued transactions

(1) The order of the Adjudicating Authority under sub-section (1) of section 45 may provide for the following: –

(a) require any property transferred as part of the transaction, to be vested in the corporate debtor;

(b) release or discharge (in whole or in part) any security interest granted by the corporate debtor;

resolution professional as the case may be, as the Adjudicating Authority may direct; or

(d) require the payment of such consideration for the transaction as may be determined by an independent expert.

VL Note : –

Section 49 Transactions defrauding creditors

(1) Where the corporate debtor has entered into an undervalued transaction as referred to in sub-section (2) of section 45

and the Adjudicating Authority is satisfied that such transaction was deliberately entered into by such corporate debtor –

(a) for keeping assets of the corporate debtor beyond the reach of any person who is entitled to make a claim against

the corporate debtor; or

(b) in order to adversely affect the interests of such a person in relation to the claim, the Adjudicating Authority shall

make an order-

(i) restoring the position as it existed before such transaction as if the transaction had not been entered into; and

(ii) protecting the interests of persons who are victims of such transactions:

Provided that an order under this section –

(a) shall not affect any interest in property which was acquired from a person other than the corporate debtor and was

acquired in good faith, for value and without notice of the relevant circumstances, or affect any interest deriving from

such an interest, and

(b) shall not require a person who received a benefit from the transaction in good faith, for value and without notice of

the relevant circumstances to pay any sum unless he was a party to the transaction.

VL Note : –

Section 50 Extortionate credit transactions

(1) Where the corporate debtor has been a party to an extortionate credit transaction involving the receipt of financial or

operational debt during the period within two years preceding the insolvency commencement date, the liquidator or the

resolution professional as the case may be, may make an application for avoidance of such transaction to the Adjudicating

Authority if the terms of such transaction required exorbitant payments to be made by the corporate debtor.

(2) The Board may specify the circumstances in which a transactions which shall be covered under sub-section (1).

Explanation. – For the purpose of this section, it is clarified that any debt extended by any person providing financial services

which is in compliance with any law for the time being in force in relation to such debt shall in no event be considered as an

extortionate credit transaction.

VL Note : –

Section 51 Orders of Adjudicating Authority in respect of extortionate credit transactions

Where the Adjudicating Authority after examining the application made under subsection (1) of section 50 is satisfied that

the terms of a credit transaction required exorbitant payments to be made by the corporate debtor, it shall, by an order –

(a) restore the position as it existed prior to such transaction;

(b) set aside the whole or part of the debt created on account of the extortionate credit transaction;

(d) require any person who is, or was, a party to the transaction to repay any amount received by such person; or

(e) require any security interest that was created as part of the extortionate credit transaction to be relinquished in

favour of the liquidator or the resolution professional, as the case may be.

VL Note : –

Section 52 Secured creditor in liquidation proceedings

(1) A secured creditor in the liquidation proceedings may-

(a) relinquish its security interest to the liquidation estate and receive proceeds from the sale of assets by the liquidator

in the manner specified in section 53; or

(b) realise its security interest in the manner specified in this section.

(2) Where the secured creditor realises security interest under clause (b) of subsection (1), he shall inform the liquidator of

such security interest and identify the asset subject to such security interest to be realised.

(3) Before any security interest is realised by the secured creditor under this section, the liquidator shall verify such security

interest and permit the secured creditor to realise only such security interest, the existence of which may be proved either –

(a) by the records of such security interest maintained by an information utility; or

(b) by such other means as may be specified by the Board.

(4) A secured creditor may enforce, realise, settle, compromise or deal with the secured assets in accordance with such law

as applicable to the security interest being realised and to the secured creditor and apply the proceeds to recover the debts

due to it.

(5) If in the course of realising a secured asset, any secured creditor faces resistance from the corporate debtor or any

person connected therewith in taking possession of, selling or otherwise disposing off the security, the secured creditor may

make an application to the Adjudicating Authority to facilitate the secured creditor to realise such security interest in

accordance with law for the time being in force.

(6) The Adjudicating Authority, on the receipt of an application from a secured creditor under sub-section (5) may pass such

order as may be necessary to permit a secured creditor to realise security interest in accordance with law for the time being

in force.

(7) Where the enforcement of the security interest under sub-section (4) yields an amount by way of proceeds which is in

excess of the debts due to the secured creditor, the secured creditor shall-

(a) account to the liquidator for such surplus; and

(b) tender to the liquidator any surplus funds received from the enforcement of such secured assets.

(8) The amount of insolvency resolution process costs, due from secured creditors who realise their security interests in the

manner provided in this section, shall be deducted from the proceeds of any realisation by such secured creditors, and they

shall transfer such amounts to the liquidator to be included in the liquidation estate.

(9) Where the proceeds of the realisation of the secured assets are not adequate to repay debts owed to the secured creditor,

the unpaid debts of such secured creditor shall be paid by the liquidator in the manner specified in clause (e) of sub-section

(1) of section 53.

VL Note : –

Section 53 Distribution of assets

(1) Notwithstanding anything to the contrary contained in any law enacted by the Parliament or any State Legislature for the

time being in force, the proceeds from the sale of the liquidation assets shall be distributed in the following order of priority

and within such period as may be specified, namely: –

(a) the insolvency resolution process costs and the liquidation costs paid in full;

(b) the following debts which shall rank equally between and among the following:

(i) workmen’s dues for the period of

twenty-four months preceding the liquidation commencement date; and

(ii) debts owed to a secured creditor in the event such secured creditor has relinquished security in the manner set

out in section 52;

liquidation commencement date;

(d) financial debts owed to unsecured creditors;

(e) the following dues shall rank equally between and among the following: –

(i) any amount due to the Central Government and the State Government including the amount to be received on

account of the Consolidated Fund of India and the Consolidated Fund of a State, if any, in respect of the whole or

any part of the period of two years preceding the liquidation commencement date;

(ii) debts owed to a secured creditor for any amount unpaid following the enforcement of security interest;

(f) any remaining debts and dues;

(g) preference shareholders, if any; and

(h) equity shareholders or partners, as the case may be.

(2) Any contractual arrangements between recipients under sub-section (1) with equal ranking, if disrupting the order of

priority under that sub-section shall be disregarded by the liquidator.

(3) The fees payable to the liquidator shall be deducted proportionately from the proceeds payable to each class of recipients

under sub-section (1), and the proceeds to the relevant recipient shall be distributed after such deduction.

Explanation. – For the purpose of this section-

(i) it is hereby clarified that at each stage of the distribution of proceeds in respect of a class of recipients that rank

equally, each of the debts will either be paid in full, or will be paid in equal proportion within the same class of recipients,

if the proceeds are insufficient to meet the debts in full; and

(ii) the term “workmen’s dues” shall have the same meaning as assigned to it in section 326 of the Companies Act, 2013

(18 of 2013).

VL Note : –

Section 54 Dissolution of corporate debtor

(1) Where the assets of the corporate debtor have been completely liquidated, the liquidator shall make an application to the

Adjudicating Authority for the dissolution of such corporate debtor.

(2) The Adjudicating Authority shall on application filed by the liquidator under sub-section (1) order that the corporate

debtor shall be dissolved from the date of that order and the corporate debtor shall be dissolved accordingly.

(3) A copy of an order under sub-section (2) shall within seven days from the date of such order, be forwarded to the

authority with which the corporate debtor is registered.

VL Note : –