Case Law Details
Alchemist Asset Reconstruction Co. Ltd. Vs. Moser Baer India Limited (NCLT Delhi, Principal Bench)
Under Section 36(4) (a) (III), the expression ‘liquidation estate’ has been defined and it is clarified that all sums due to any workman or employee from the provident fund, pension fund and gratuity fund, were not to constitute and included in the expression “liquidation estate assets”. Once the sum due to any workman or employee from the provident fund, pension fund and gratuity fund are not constitute a part of the liquidation estate, we fail to understand as to how Section 53 could be invoked along with its explanation. According to Section 53, the proceeds from the sale of the liquidation assets are to be distributed in the manner specified therein. Therefore, the aforesaid amount of the workmen dues cannot be a part of liquidation estate assets.
Once the sum due to any workman or employee from the provident fund, pension fund and gratuity fund are not constitute a part of the liquidation estate, we fail to understand as to how Section 53 could be invoked along with its explanation. According to Section 53, the proceeds from the sale of the liquidation assets are to be distributed in the manner specified therein .Therefore, the aforesaid amount of the workmen dues cannot be a part of liquidation estate assets.
FULL TEXT OF ORDER OF NCLT DELHI, PRINCIPAL BENCH
This is an application filed on behalf of the workmen of the company in liquidation, namely, Moser Baer India Limited. The prayer made by the workmen is that the directions be issued to the liquidator to exclude the amount due to them towards provident fund, pension fund and gratuity fund from the waterfall mechanism envisaged under Section 53 of the Insolvency and Bankruptcy Code, 2016 and pay to them the provident fund dues, pension fund dues and gratuity fund dues as they will not constitute part of the liquidation estate. Directions have also been sought to pay the dues towards workmen to the workmen in accordance with Section 25 FFF of the Industrial Dispute Act, 1947 and pass appropriate directions to the liquidator to pay arrears due from 01.09.2017 to 20.09.2018 being less than 24 months preceding the order of liquidation without following the waterfall mechanism envisaged under Section 53 of the Code.
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