Workmen's charge secures employee dues in company winding up, enabling liquidator enforcement and parity with secured creditors. In winding up of an insolvent company, insolvency rules apply to provable debts, valuation of contingent liabilities, and creditor rights. A secured creditor's security is subject to a pari passu charge in favour of workmen to the extent of the workmen's portion; the liquidator may enforce that charge and apply proceeds rateably to workmen's dues. A secured creditor who realises security must pay his share of preservation expenses, calculated by apportioning total preservation costs net of the workmen's share. Definitions set out 'workmen', 'workmen's dues' and the method for computing the 'workmen's portion.'
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Provisions expressly mentioned in the judgment/order text.
Workmen's charge secures employee dues in company winding up, enabling liquidator enforcement and parity with secured creditors.
In winding up of an insolvent company, insolvency rules apply to provable debts, valuation of contingent liabilities, and creditor rights. A secured creditor's security is subject to a pari passu charge in favour of workmen to the extent of the workmen's portion; the liquidator may enforce that charge and apply proceeds rateably to workmen's dues. A secured creditor who realises security must pay his share of preservation expenses, calculated by apportioning total preservation costs net of the workmen's share. Definitions set out "workmen", "workmen's dues" and the method for computing the "workmen's portion."
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