Creditor's Affidavit in Liquidation
When a company goes into liquidation (voluntary or compulsory winding up, or liquidation under IBC): creditors must file an affidavit proving their debt with the liquidator to receive distribution from the company's assets. The affidavit establishes: (a) the existence of the debt, (b) the amount due, (c) the basis of the claim, (d) any security held, (e) supporting documents. Only PROVED debts are admitted for distribution.
Specimen Affidavit
[Illustrative format]
AFFIDAVIT OF PROOF OF DEBT
In the matter of [Company Name] (In Liquidation)
Before the Liquidator / NCLT [City] Bench
I, [Creditor Name/Authorized Representative], [Designation], of [Creditor Company/Individual], [Address], do hereby solemnly affirm and state on oath:
1. I am the [creditor/authorized representative of the creditor company] and am competent to swear this affidavit.
2. [Company Name] (In Liquidation) (the "Company") is INDEBTED to me/my company in the sum of Rs. [Amount] as on the date of winding up order/liquidation commencement ([Date]).
3. The debt arises from: [describe the nature of the debt -- supply of goods vide Invoice Nos. [Numbers] dated [Dates] / loan advanced on [Date] vide agreement dated [Date] / services rendered during [Period] / rent for premises at [Address] for the period [Period]].
4. Particulars of the debt:
| Description | Invoice/Ref. | Date | Amount (Rs.) |
|---|---|---|---|
| [Goods supplied] | [Inv-001] | [Date] | [Amount] |
| [Interest accrued] | -- | [Date] | [Amount] |
| Total | [Amount] |
5. Security: [I hold NO security for the debt / I hold the following security: mortgage on [property], pledge of [goods], personal guarantee of [Name]. The estimated value of the security is Rs. [Amount]. I claim as a [secured/unsecured/preferential] creditor.]
6. I have NOT received any payment or satisfaction for the said debt, except [if any partial payment was received -- state amount and date].
7. The supporting documents are attached as Exhibits: (a) Exhibit A -- Invoices, (b) Exhibit B -- Delivery challans/proof of service, (c) Exhibit C -- Ledger account extract, (d) Exhibit D -- Agreement/contract, (e) Exhibit E -- Correspondence/demand letters.
8. The contents of this affidavit are true and correct to my personal knowledge.
DEPONENT
[Signature] | [Name] | Date: [Date]
Solemnly affirmed before me on [Date] at [City].
[Notary Public / Oath Commissioner]
IBC Claims Process
Under the Insolvency and Bankruptcy Code, 2016: during CIRP (Corporate Insolvency Resolution Process): (a) the Resolution Professional (RP) invites claims from creditors (public announcement under Section 15), (b) creditors file claims in the PRESCRIBED FORM (Form B for operational creditors, Form C for financial creditors, Form D for workmen/employees), (c) the RP verifies and admits/rejects claims, (d) admitted claims are included in the Committee of Creditors (for financial creditors) or claims list (for operational creditors). During LIQUIDATION: claims are filed with the Liquidator in the prescribed form -- similar to the affidavit format above.
Priority of Claims in Liquidation
Under Section 53 IBC (waterfall): (1) CIRP costs and liquidation costs, (2) SECURED creditors (with relinquished security), (3) WORKMEN dues (24 months) and secured creditors (not relinquished), (4) EMPLOYEE dues (12 months), (5) UNSECURED creditors, (6) Government dues (2 years), (7) Remaining debts, (8) PREFERENCE shareholders, (9) EQUITY shareholders.
Disclaimer: This article is for informational purposes only and does not constitute legal or professional advice. While every effort has been made to ensure accuracy based on the latest laws and amendments, readers should consult a qualified professional before acting on any information provided. For expert assistance, contact us.