The question (15 marks)
Explain the order of distribution of assets under section 53 and comment on the position of Government dues and of secured creditors. (15 marks)
MU Module II, head 2.3.
Plan your answer on paper before you look at the authorities — issue first, then the rule, then apply it to these facts.
It tests Unit 2 · Corporate Insolvency and Liquidation of Bankruptcy Laws.
Authorities you will need
- Section 53 of the Code
- Section 52 of the Code, on the secured creditor's election
- Section 36(4), excluding provident fund, pension and gratuity sums from the estate
- The long title, on alteration in the order of priority of payment of Government dues
How an answer is marked
A full-marks answer names the issue in one line, states the rule with its section, cites the authority, applies it to these facts and concludes — in that order. The app's model answer for this question is written in exactly that shape, with a checklist to mark your own attempt against.