CS Professional · Insolvency and Bankruptcy - Law and Practice · Bankruptcy for Individuals and Partnership Firms
On the passing of a bankruptcy order against Sunita Nair, which of the following correctly states what happens to her estate?
Her estate vests in the bankruptcy trustee as provided in section 154 and is divided among her creditors. The vesting happens on passing of the bankruptcy order, and neither the Tribunal nor a creditors' committee takes the estate.
- AIt vests in the bankruptcy trustee and is divided among her creditorsCorrect
- BIt remains with Sunita and is divided among her creditors by the Adjudicating Authority
- CIt vests in the Debt Recovery Tribunal until the discharge order is passed
- DIt vests in the creditors' committee, which distributes it by resolution
Explanation
On the bankruptcy order, the estate of the bankrupt vests in the bankruptcy trustee as provided in section 154, and it is divided among the creditors. The Tribunal and a creditors' committee are not the vesting recipients under this provision.
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