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TMI BlogLiquidation Estate [ Section 36 ]X X X X Extracts X X X X X X X X Extracts X X X X ..... of Assets [ Section 36(1) ] For the purposes of liquidation, the liquidator shall form an estate of the assets mentioned in section 36(3), which will be called the liquidation estate in relation to the corporate debtor. Liquidator to hold Liquidation Estate in Fiduciary [ Section 36(2) ] The liquidator shall hold the liquidation estate as a fiduciary for the benefit of all the creditors. Assets which for Part of Liquidation [ Section 36(3) ] Subject to section 36(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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date. Assets which does not part of Liquidation of Estate [ Section 36(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 workman 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 sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceeding of VNR Infrastructures Limited. The sub-registrar refused to register the property in the name of the petitioner at the behest of the Income Tax Department, which claimed a charge over the immovable property pursuant to attachment proceedings against which the writ petition was filed. The High Court held that the tax dues, being an input to the Consolidated Fund of India and of the states, clearly come within the ambit of section 53(1)(e) of the IBC. It further held that the Income Tax Department cannot claim any priority merely because the order of attachment was long prior to the initiation of liquidation proceedings under the IBC against VNR Infrastructures Limited. Further, section 36(3)(b) of the IBC. The said order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assets of the CD, the question of distribution of the provident fund, pension fund, or gratuity fund does not arise. As the liquidation estate assets of the CD under section 36(1) , read with section 36(3) , do not include any sum due to any workman or employee from the provident fund, the pension fund, or the gratuity fund, for the purpose of distribution of assets, these funds cannot be included. An appeal against the order has been filed by the FC and as of this writing, the matter is pending in the Supreme Court. Mr. Savan Godiawala Vs. Mr. Apalla Siva Kumar - NCLT Dated 11.02.2020 The NCLAT, based on its judgment in the Moser Baer case, observed that in terms of section 36(4)(a)(iii) of the IBC, sums due t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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