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CS Professional · Insolvency and Bankruptcy - Law and Practice · Liquidation of Corporate Person

Orchid Homes Ltd is in liquidation. Flat 5B in its project was handed over to allottee Mr Iyer, who has not got the conveyance deed. Gold ornaments of Rs 8 lakh were deposited with the company as a bailment by a customer. Provident fund dues of workmen are held in the company's fund. The company's own unsold inventory and a patent also exist. Which group is wholly outside the liquidation estate?

Bailed ornaments, workmen's provident fund sums and Flat 5B are all outside the estate. Bailment assets and provident fund sums are excluded by the Code, and the Liquidation Process Regulations exclude real estate assets whose possession was given to an allottee. Unsold inventory and the patent remain in the estate.

  1. AFlat 5B, bailed ornaments and the patent
  2. BBailed ornaments, workmen's provident fund sums and Flat 5BCorrect
  3. CWorkmen's provident fund sums, unsold inventory and the patent
  4. DFlat 5B, unsold inventory and bailed ornaments

Explanation

Section 36(4)(a) excludes bailment assets and sums due to workmen from the provident fund. The Liquidation Process Regulations exclude assets in a real estate project where possession has been given to an allottee, so Flat 5B is excluded. Unsold inventory and the patent (intellectual property) remain in the estate.

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