36 (4) (a)

Wages/Salaries of the Workmen/Employees for the period during CIRP can only be included in the CIRP costs if it is established that the IRP/Resolution Professional managed the operations of the Corporate Debtor as a Going Concern during the CIRP and that the concerned workmen/employees actually worked during the CIRP – Sunil Kumar Jain and others Vs. Sundaresh Bhatt and others – Supreme Court

/ 52 minutes of reading

The issue before Hon’ble Supreme Court is with respect to wages/salaries of the workmen/employees during the CIRP period and the amount due and payable to the respective workmen/employees towards Pension Fund, Gratuity Fund and Provident Fund. Hon’ble Supreme Court held that:

i) that the wages/salaries of the workmen/employees of the Corporate Debtor for the period during CIRP can be included in the CIRP costs provided it is established and proved that the Interim Resolution Professional/Resolution Professional managed the operations of the corporate debtor as a going concern during the CIRP and that the concerned workmen/employees of the corporate debtor actually worked during the CIRP and in such an eventuality, the wages/salaries of those workmen/employees who actually worked during the CIRP period when the resolution professional managed the operations of the corporate debtor as a going concern, shall be paid treating it and/or considering it as part of CIRP costs and the same shall be payable in full first as per Section 53(1)(a) of the IB Code;

ii) considering Section 36(4) of the IB code and when the provident fund, gratuity fund and pension fund are kept out of the liquidation estate assets, the share of the workmen dues shall be kept outside the liquidation process and the concerned workmen/employees shall have to be paid the same out of such provident fund, gratuity fund and pension fund, if any, available and the Liquidator shall not have any claim over such funds.

Wages/Salaries of the Workmen/Employees for the period during CIRP can only be included in the CIRP costs if it is established that the IRP/Resolution Professional managed the operations of the Corporate Debtor as a Going Concern during the CIRP and that the concerned workmen/employees actually worked during the CIRP – Sunil Kumar Jain and others Vs. Sundaresh Bhatt and others – Supreme Court Read Post »

The Successful Resolution Applicant should release full provident fund dues in terms of the provisions of the Employee’s Provident Fund and Miscellaneous Provident Act, 1952 & PF dues are not the assets of the CD as amply made clear by the provisions of Section 36(4)(a)(iii) of the I& B Code, 2016 – Sikander Singh Jamuwal Vs. Vinay Talwar RP- NCLAT New Delhi

/ 30 minutes of reading

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The Successful Resolution Applicant should release full provident fund dues in terms of the provisions of the Employee’s Provident Fund and Miscellaneous Provident Act, 1952 & PF dues are not the assets of the CD as amply made clear by the provisions of Section 36(4)(a)(iii) of the I& B Code, 2016 – Sikander Singh Jamuwal Vs. Vinay Talwar RP- NCLAT New Delhi Read Post »

The claim of wages cannot be sanctioned unless the statutorily constituted forums either under the Industrial Dispute Act, Payment of Wages Act and Bonus Act have rendered its decision – Sabu K.V. Vs. Shri. Ravindra Chaturvedi Liquidator of Excel Glasses Ltd. – NCLT Kochi Bench

/ 4 minutes of reading

AA 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 claims. Section 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 property of the Corporate Debtor, which is not the part of the Liquidation Estate. It is clear that in terms of sub-Section (4)(a)(iii) of Section 36 all sums due to any workman or employees from the Provident Fund, Pension Fund and the Gratuity Fund, do not form part of the liquidation estate/liquidation assets of the Corporate Debtor.

The claim of wages cannot be sanctioned unless the statutorily constituted forums either under the Industrial Dispute Act, Payment of Wages Act and Bonus Act have rendered its decision – Sabu K.V. Vs. Shri. Ravindra Chaturvedi Liquidator of Excel Glasses Ltd. – NCLT Kochi Bench Read Post »

After approval of the Resolution Plan by the AA, all claims that are not  part  of  the  Resolution  Plan  shall  stand  extinguished,  No  person  is entitled to initiate or continue any proceeding regarding a claim that is not part of the Resolution Plan – Regional Provident Commissioner EPFO Vs. Vandana Garg – NCLAT Chennai

/ 26 minutes of reading

NCLAT held that the Appellants claim about Provident Fund dues amounting  to  ₹1,95,01,301/-,  which  was  earlier  raised  at  the  time  of initiation of CIRP and was later admitted, stood frozen and will be binding on all the Stakeholders, including the Central Government. After approval of the Resolution Plan by the Adjudicating Authority, all such claims that are not  part  of  the  Resolution  Plan  shall  stand  extinguished.  No  person  is entitled to initiate or continue any proceeding regarding a claim that is not part of the Resolution Plan.

After approval of the Resolution Plan by the AA, all claims that are not  part  of  the  Resolution  Plan  shall  stand  extinguished,  No  person  is entitled to initiate or continue any proceeding regarding a claim that is not part of the Resolution Plan – Regional Provident Commissioner EPFO Vs. Vandana Garg – NCLAT Chennai Read Post »

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

/ 24 minutes of reading

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 »

Whether a Secured Financial Creditor while opting out of liquidation process under Section 52(1)(b) of the IBC is barred from selling the secured assets to the Promoters or its related party or the persons who are ineligible in terms of Section 29A of the IBC? – State Bank of India Vs. Anuj Bajpai (Liquidator) – NCLAT New Delhi

/ 17 minutes of reading

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Whether a Secured Financial Creditor while opting out of liquidation process under Section 52(1)(b) of the IBC is barred from selling the secured assets to the Promoters or its related party or the persons who are ineligible in terms of Section 29A of the IBC? – State Bank of India Vs. Anuj Bajpai (Liquidator) – NCLAT New Delhi Read Post »

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