In a case, where no fund is created by a company, in violation of the Statutory provision of the Payment of Gratuity Act, 1972, then the Liquidator cannot be directed to make the payment of gratuity to the employees because the Liquidator has no domain to deal with the properties of the Corporate Debtor, which are not part of the liquidation estate – Mr Savan Godiwala Vs. Mr. Apalla Siva Kumar – NCLAT

NCLAT held that it is the settled position of law, that the provident fund, the pension fund and the gratuity fund, do not come within the purview of liquidation estate for the purpose of distribution of assets under Section 53 of the Code.  Based on this, the only inference which can be drawn is that Pension Fund,  Gratuity  Fund  and  Provident  Fund  can‘t  be  utilised,  attached  or distributed by the liquidator, to satisfy the claim of other creditors. Sec 36(2) of the Code 2016 provides that the Liquidator shall hold the Liquidation Estate in fiduciary for the benefit of all the Creditors. The Liquidator has no domain to deal with any other property of the corporate debtor, which is not the part of the Liquidation Estate. In a case, where no fund is created by a company, in violation of the Statutory provision of the Sec 4 of the Payment of Gratuity Act, 1972, then in that situation also, the Liquidator cannot be directed to make the payment of gratuity to the employees because the Liquidator has no domain to deal with the properties of the Corporate Debtor, which are not part of the liquidation estate.

In a case, where no fund is created by a company, in violation of the Statutory provision of the Payment of Gratuity Act, 1972, then the Liquidator cannot be directed to make the payment of gratuity to the employees because the Liquidator has no domain to deal with the properties of the Corporate Debtor, which are not part of the liquidation estate – Mr Savan Godiwala Vs. Mr. Apalla Siva Kumar – NCLAT Read Post »