TaxTMI 
TaxTMI 
Distribution of Assets by the Liquidator [ Section 53 ]
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.... Distribution of proceeds from the sale of the liquidation assets [ Section 53(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 and in such manner 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 ....
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.... (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. Commencing Distribution - Regulation 42 of IBBI of (Liquidation Process) Regulation, 2016 * Subject to the provisions of section 53, the liquidator shall not commence distribution before the list of stakeholders and the asset memorandum has been filed with the Adjudicating Authority. * Th....
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.... assigned or transferred due to its peculiar nature or other special circumstances. * (2) The application seeking permission of the Adjudicating Authority under sub-regulation (1) shall- * (a) identify the asset; * (b) provide a value of the asset; * (c) detail the efforts made to sell the asset, if any; and * (d) provide reasons for such distribution. Liquidator to realize uncalled capital or unpaid capital contribution - Regulation 40 of IBBI (Liquidation Process) Regulation, 2016 * (1) The liquidator shall realize any amount due from any contributory to the corporate debtor. * (2) Notwithstanding any charge or encumbrance on the uncalled capital of the corporate debtor, the liquidator shall be entitled to call and realize....
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.... & Anr. Vs. Union of India &Ors. - SC Dated 25.01.2019 * There is an intelligible differentia between the financial debts and operational debts, which are unsecured, which has direct relation to the object sought to be achieved by the Code. It can be seen that unsecured debts are of various kinds and as long as there is some legitimate interests sought to be protected, having relation to the object sought to be achieved by the statute in question, Article 14 of the Constitution does not get infracted. Accordingly, validity of section 53 was upheld. * Binani Industries Ltd. Vs. Bank of Baroda & Anr. - NCLAT Dated 14.11.2018 * Section 53, including Explanation given therein cannot be relied upon while approving the resolution plan. Ho....