Section 36

For the purposes of liquidation, the liquidator shall form an estate of the assets mentioned in sub-section (3), which will be called the liquidation estate in relation to the corporate debtor.

The liquidator shall hold the liquidation estate as a fiduciary for the benefit of all the creditors.

Subject to sub-section (4), the liquidation estate shall comprise all liquidation estate assets which shall include the following: -

any assets over which the corporate debtor has ownership rights, including all rights and interests therein as evidenced in the balance sheet of the corporate debtor or an information utility or records in the registry or any depository recording securities of the corporate debtor or by any other means as may be specified by the Board, including shares held in any subsidiary of the corporate debtor;

assets that may or may not be in possession of the corporate debtor including but not limited to encumbered assets;

tangible assets, whether movable or immovable;

intangible assets including but not limited to intellectual property, securities (including shares held in a subsidiary of the corporate debtor) and financial instruments, insurance policies, contractual rights;

assets subject to the determination of ownership by the court or authority;

any assets or their value recovered through proceedings in respect of an avoidance transaction or fraudulent or wrongful trading or under section 47;128

any asset of the corporate debtor in respect of which a secured creditor has relinquished security interest;

any other property belonging to or vested in the corporate debtor at the insolvency commencement date; and

all proceeds of liquidation as and when they are realised. 124 Word “invite and” omitted by Act No. 6 of 2026, sec. 23(a)

(w.e.f. 26-5-2026). 125 Clause (l) substituted by Act No. 6 of 2026, sec. 23(a)

(w.e.f. 26-5-2026). 126 Explanation inserted by Act No. 6 of 2026, sec. 23(a)

(w.e.f. 26-5-2026). Accordingly, the pre-amendment provisions identified in the Explanation continue to govern liquidation and voluntary liquidation processes initiated on or before 26-5-2026. 128 In section 36(3)

, words “proceedings for avoidance of transactions in accordance with this Chapter” substituted by Act No. 6 of 2026, sec. 24, with “proceedings in respect of an avoidance transaction or fraudulent or wrongful trading or under section 47” (w.e.f. 26-5-2026).

The following shall not be included in the liquidation estate assets and shall not be used for recovery in the liquidation: -

assets owned by a third party which are in possession of the corporate debtor, including -

assets held in trust for any third party;

bailment contracts;

all sums due to any workman or employee from the provident fund, the pension fund and the gratuity fund;

other contractual arrangements which do not stipulate transfer of title but only use of the assets; and

such other assets as may be notified by the Central Government in consultation with any financial sector regulator;

assets in security collateral held by financial services providers and are subject to netting and set-off in multi- lateral trading or clearing transactions;

personal assets of any shareholder or partner of a corporate debtor as the case may be provided such assets are not held on account of avoidance transactions that may be avoided under this Chapter;

assets of any Indian or foreign subsidiary of the corporate debtor; or

any other assets as may be specified by the Board, including assets which could be subject to set-off on account of mutual dealings between the corporate debtor and any creditor.