E-KNOWLEDGE ACHIEVER: IBC-SECTION 52 TO SECTION 54

Section 52 Secured creditor in liquidation proceedings

A secured creditor in the liquidation proceedings may relinquish its security interest to the liquidation estate and realize its security interest in the manner specified in this section, he shall inform the liquidator of such security interest and identify the asset subject to such security interest to be realized.

Enforcement of the security interest yields an amount by way of proceeds which is in excess of the debts due to secured creditor, the secured creditor shall account to the liquidator for such surplus and tender to the liquidator any surplus funds received from the enforcement of such secured assets.

Proceeds of the realization of the secured assets are not adequate to repay debts owed to the secured creditor, the liquidator shall be paid all the unpaid debts to the secured creditors in the manners as specified by the board.

SECTION 52 CHART

Sale of the liquidation assets and which amount to be generated shall be distributed in the following order of priority and within such period as may be specified by the board. Insolvency resolution process costs and liquidation costs paid in full to the liquidator.
The following debts shall be rank equally and shall be paid by the liquidator to the creditors or workmen’s due for the period of 24 months preceding the liquidation commencement date and debts owned to a secured creditor in the event such secured creditor has relinquished security in the manner set out in section 52.
Wages and any unpaid dues owed to employees.
Financial debts owed to unsecured creditors.
Any contractual arrangement between recipients under subsection (1) with equal ranking if disrupting the order of priority under that sub-section shall be disregarded by the liquidator.
Fees payable to the liquidator shall be deducted proportionately from the proceeds payable to each of the class of recipients under sub-section(1).
For this section its hereby clarified that each stage of the distribution of proceeds in respect of a class of recipients that rank equally, each of the debts will be either be paid in full or in equal proportion within the same class of recipients.

SECTION 53 CHART

Where the assets of the corporate debtor have been completely liquidated then the liquidator shall make an application to the NCLT for the dissolution of such corporate debtor.

The NCLT shall on an application filed by the liquidator under sub-section (1) order that the corporate debtor shall be dissolved from the date of that and the corporate debtor shall be dissolved accordingly and copy of the order under sub-section (2) shall be within 7 days from the date of such order be forwarded to the authority with which the corporate debtor is registered.

SECTION 54 CHART