TaxTMI 
TaxTMI 
2022 (1) TMI 1077
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....ng of geared scooters and had an employee strength of more than 6,000 employees including staff and workers. Around the late 1990s in view of the significant change in the consumer behavior towards motorcycles as opposed to scooters, the Company suffered substantial losses. On inability to arrange fresh working capital, the Company was only able to achieved partial restructuring in the year 2005. However, in view of the rapid erosion of the Company's net worth, a reference was filed before the Board for Industrial and Financial Restructuring BIFR under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 SICA. In the proceeding of BIFR held on 8.5.2007, an operating agency was appointed to prepare a revival scheme if feasible. The workmen of the petitioner-Company resorted to strikes and demonstrations with effect from 27.2.2006, which paralyzed its functioning and a lockout was declared with effect from 7.3.2006. In order to salvage the Company's business, the management of the Company and its workmen represented by the registered union of the Company namely Lohia Machines (LML) Karmchari Sangh LMLKS, engaged in protracted tripartite discussions ....
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....of 2008, filed by the respondent-Union came to be dismissed by this Court by a judgement dated 1.2.2013. However, Special Leave Petitions filed against the aforesaid judgement passed in the Special Appeals are pending before the Supreme court in which the effect and operation of the order dated 1.2.2013 has been stayed until further orders. The order of reference dated 21.5.2008 made under Section 4K of the Act was also challenged by the petitioner-Company in Writ Petition No. 33896 of 2007 which was dismissed by a judgement delivered on 17.09.2010. The Special Appeal No. 1699 of 2010 filed challenging the judgement of the writ Court was also dismissed by means of a judgement dated 31.1.2014. A corporate insolvency resolution process of the petitioner-company, which is a corporate debtor, was initiated pursuant to an order dated 18.5.2017 passed by the NCLT admitting the company petition bearing CP No. (IB)-55/ALD./2017 filed under Section 10 of the Insolvency and Bankruptcy Code, 2016 Code. The NCLT issued consequential directions while passing an order of moratorium under Section 14 of the Code. Since, the resolution plan submitted by one Rimjhim Ispaat Limited was rejected by ....
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....s implemented. It is contended that since the registration of the respondent-Union, was canceled by the order of the Court, therefore, under the provisions of Section 6(I) of the U.P. Act, none of its officers were entitled to represent the workmen before the Industrial Tribunal. It is contended that the validity of the settlement was upheld in Special Appeal before this Court, which order has become final and the lay off compensation contemplated in the settlement is strictly in accordance with the provisions of the U.P. Act. The contention is that after the repeal of the SICA, steps were taken by the Company before the NCLT under the provisions of the Code in which an order of moratorium was passed under the provisions of Section 14 of the Code. Given the order of the NCLT, the Labour Court ought not to have proceeded with the matter. It is further contended that once the order of liquidation was passed on 23.3.2018 and the Liquidator was appointed by NCLT by the order dated 9.4.2018, no award could have been made by the Industrial Tribunal for grant of full back wages and other dues in view of the provisions of Section 53 of the Code. It is contended that there was no material b....
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....llenged in a writ petition. It is contended that in view of the interim order passed by the Supreme Court in a Special Leave Petition staying the operation of the order of the Division Bench of this Court passed in a Special Appeal, the registration of the respondent-Union stood revived. It is contended that even an unregistered Union is not debarred from representing the interest of a workman. In this regard, the learned counsel has referred to the aforesaid judgment of the Division Bench of this Court in Special Appeal No.1699 of 2010 in which, while observing that whether the circumstances existing after seven years of the settlement still justify its terms to be binding on more than 2500 workmen, which is about 80% of the total number of workmen, which were employed on the date of lock-out requires to be examined by the Industrial Tribunal, the Court held that it is not disputed that even the workmen of unregistered Union may make a reference by raising an industrial dispute. Learned counsel, in this regard, has referred to paragraph no. 4 of the judgment of the Supreme Court in the matter of Newspaper Limited Allahabad vs. U.P. State Industrial Tribunal AIR 1960 SC 1328. The l....
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....08 passed by the ex-officio Secretary to the Labour Department of the Government of Uttar Pradesh communicating the opinion of the Governor regarding the industrial dispute between the employer and its workmen and referring the same under Section 4-K of the U.P. Act suo moto. The aforesaid order of reference was challenged by the petitioner-company in a writ petition which came to be dismissed on 17.09.2010. In the Special Appeal filed by the petitioner-company, M/s L.M.L. Limited M/s L.M.L. Limited v. State of U.P. And others - Special Appeal No.1699 of 2010, against the aforesaid order, the Appellate Court upheld the settlement to be binding despite it being unregistered, however, held that the settlement is not binding on all the workmen of the petitioner-company. It was held as follows:- "26. We find that though learned Single Judge has committed an error in law in holding that the settlement or agreement to be binding must be registered under Section 6-B of the Industrial Disputes Act and has ignored the ratio of the judgment in Herbertsons Limited vs. The Workmen of Herbertsons Limited (supra) as well as the judgment of Supreme Court in National Engineering Industries Ltd v....
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....ference. 29. The legal position, that even the workmen of unregistered union may make a reference, is not disputed and thus even if the LML Mazadoor Ekta Sangathan, Kanpur is not a registered union, it could have raised an industrial dispute. In the present case, the industrial dispute has been referred suo moto by the State Government, which makes the case of the petitioner still weaker inasmuch as the satisfaction of the State Government cannot be lightly interfered with by the High Court under Article 226 of Constitution of India, nor the settlement could be said to binding on the State Government for all times to come, if it is satisfied that there exists an industrial dispute which needs to be adjudicated and resolved. The settlement in any case on the face of its terms was inconclusive and was entered into to bring temporary industrial peace on 13.4.2007. It did not end the relationship of employer and employee. 30. We further find that even if the settlement dated 13.4.2007 for arguments sake was valid and binding on all the workmen, its effect and consequence on all the workmen cannot be considered to be valid for all times to come and that at this distance of time, whe....
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....bour Court or Tribunal shall be represented by a legal practitioner, unless the consent of the other party or parties to the proceeding and the leave of the Presiding Officer of the Labour Court or Tribunal, as the case may be, has been obtained. (3) No officer of a Union shall be entitled to represent any party unless a period of two years has elapsed since its registration under the Indian Trade Unions Act, 1926, and the Union has been registered for one trade only: Provided that an officer of a federation of unions may subject to such conditions as may be prescribed represent any party." It has been observed by this court in the Special Appeal of L.M.L. Limited (supra) that the reference was made suo moto by the State Government and that it was always open to the workmen of the petitioner-company who are members of the respondent-Union, which is stated to be unregistered, to raise an industrial dispute. Rule 40 of the U.P. Industrial Disputes Rules, 1957 U.P. Rules reads as follows:- "40. Representation of parties. - (1) The parties may, in their discretion, be represented before a Board, Labour Court or Tribunal, - (i) in the case of a workman subject to the provision ....
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....any has specifically referred to paragraph no.38 thereof in which it is held as follows:- "38. In the writ petition filed by Respondents 1 and 2 their locus standi to challenge the appointment of the appellant was asserted in the following words: "The petitioner Association is a trade union registered under the Trade Unions Act, 1926. The petitioner is the only registered trade union existing in the 2nd respondent Board. The Board has held several negotiations with the petitioner Union with regard to the service conditions of the employees of the 2nd respondent Board since its formation in the year 1986. The Board has entered into several settlements with the petitioner Union with regard to their service conditions. The petitioner which is a recognised trade union is entitled to agitate the matter with regard to the appointment of the 3rd respondent to the Board. The petitioner is concerned about the functioning of the 2nd respondent Board, and as such is entitled to question the appointment of the 3rd respondent as Managing Director on contract basis. Hence, the petitioner has locus standi to file this writ petition." (emphasis supplied) These averments were established to b....
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....e or in appearing before the Industrial Tribunal cannot be sustained. Consideration of the settlement by the Industrial Tribunal: As regards the settlement dated 13.4.2007, its scope and extent has already been discussed by the judgement dated 31.1.2014 in the aforesaid Special Appeal of M/s L.M.L. Limited (supra). Lay-off by the petitioner-Company formed part of the settlement. The issue regarding lay-off was the subject matter of the reference made suo moto by the State Government to the Industrial Tribunal which, in turn, has answered the reference aforesaid in favour of the workmen. It, however, needs to be mentioned that the reference by the State Government does not refer to the workmen who are the members of any particular Union, but, refers to the workmen who were laid off. Given the unrest among the workers with regard to their disengagement as a result of lay off, the State Government suo moto made the order of reference under Section 4-K of the U.P. Act. It is pertinent to mention here that the award of the Industrial Tribunal is in respect of the workers who were laid off by the petitioner-company on 15.4.2007, and not only in respect of workmen having membership of ....
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..... The Industrial Tribunal has further held that in the settlement no additional benefit has been given to the workmen and they were entitled to lay-off compensation, but lay off compensation has not been paid in its entirety which is improper and illegal. The Industrial Tribunal further noticed that the partial payments of the compensation for the lay-off that was being made from the year 2017 was stopped from March, 2017 and accordingly, it held that it cannot be assumed that by means of the settlement, approval had been given to the petitioner-company to keep the workmen laid off for an indefinite period of time and not make payment of the entire compensation. Section 2(n) of the U.P. Act reads as follows:- "(n) 'Lay-off' (with its grammatical variations and cognate expressions) means the failure, refusal or inability of an employer on account of shortage of coal, power or raw materials or the accumulation of stock or the breakdown of machinery, or for other reason, to give employment to a workman whose name is borne on the muster-rolls of his industrial establishment and who has not been retrenched; Explanation. - Every workman whose name is borne on the musterroll....
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.... within this sub-section to retrench the workman in accordance with the provisions contained in Section 6-N at any time after the expiry of the first forty-five days of lay-off and when he does so, any compensation paid to the workman for having been laid-off during the preceding twelve months may be set-off against the compensation payable for retrenchment. Explanation-"Substitute workman" means a workman who is employed in an industrial establishment in the place of another workman whose name is borne on the muster rolls of the establishment, but shall cease to be regarded as such for the purposes of this section, if he has completed one year of continuous service in the establishment. As observed by the Industrial Tribunal, no documentary or oral evidence was filed on behalf of the petitioner-company which could have demonstrated that the settlement was lawful and logical. A perusal of the award impugned reveals that despite adequate opportunity to the employers, no documents whatsoever were produced, whereas the respondent-Union had produced 27 documents along with a list numbered as 38-B(2). The fact that the petitioner-company had gone into liquidation was communicated to ....
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....ing of the lockout, around 400 workmen were employed and those 400 workmen are not included in the case before the Tribunal. On behalf of the petitioner/liquidator, Shri Suraj Narain Shukla appeared as witness E.D.-1. He testified in his examination-in- chief that the industrial dispute came to an end after the settlement dated 13.04.2007. That 50% of the lay-off compensation was paid to the workmen. In his cross-examination, the witness stated that no document had been filed before the Industrial Tribunal with regard to the lay-off. The witness stated that no document with regard to payment of 50% of the lay-off compensation to the workmen had been filed before the Industrial Tribunal. The witness had no knowledge whether the settlement dated 13.04.2007 was registered or not. He stated that as per his knowledge, due amount of the lay-off compensation in terms of the settlement was paid along-with two months wages. He, however, could not state that when did the lay-off period come to an end and how many workmen were affected by the lay-off. The witness also could not state that whether any rehabilitation package was approved in respect of the establishment or not. The witness also....
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....ustified and illegal. It was further held that from the date of the lay-off, that is, from 15.04.2007, the workmen are entitled to full wages, allowances and other consequential benefits. The memorandum of settlement dated 13.04.2007, that is the bone of contention between the contesting parties, has been enclosed as Annexure No.4 to the writ petition. It is made in Form- 1 and under Section 4-F of the U.P. Act read with Rule 5(1) of the U.P. Rules. The names of the parties and their addresses are mentioned as M/s. LML Limited, Scooter Unit, Site-II, C-10, Panki Industrial Estate, Kanpur (Company) and the workmen through their Union - Lohia Machines (LML) Karmchari Sangh, 117/533, Pandu Nagar, Kanpur. The representatives of the employer were (1) Shri R.K. Srivastava, Whole time Director, and (2) Shri K.P. Tripathi, Divisional Manager (P&IR). The representatives of the workmen are 15 in numbers headed by the acting President. In the recital of the case appearing in the settlement, it is narrated that the company's performance during the previous two years had been adversely affected due to the drastic shift in the market from geared scooters to motorcycles; and inspite of significa....
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....earers of the registered and recognised Union working in the company, a tripartite meeting had taken place on 13.04.2007 before the Additional Labour Commissioner, Kanpur Region, Kanpur and the Additional Labour Commissioner, U.P. (I.R) head office at Kanpur wherein the following settlement had been arrived at between the parties with their consent. The 11 clauses of the terms of the settlement are as follows:- "Terms of Settlement 1. That it has been discussed and decided that the workman shall withdraw the strike with immediate effect and accordingly the Company shall lift the Lockout with effect from 15th April 2007. The Company, shall first start cleaning and carry out maintenance work of the plant & machinery which will take 7 to 10 days time and only thereafter normal production activity can be gradually restarted. 2. That since work and production of scooters is to be started in a phased manner depending on the market requirement and orders, it has been agreed and decided that only such number of workmen shall be taken on work and employment, in phases, as per requirement of work and production and as far as departmental seniority basis. That all other workmen, save ....
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....d as per the provisions of Certified Standing Orders of the Company and accordingly his name shall be struck off from the muster rolls of the Company. 3. That the workmen and their union agree that looking to the precarious financial condition of the company and for its revival, there will be moratorium on revision of salary/wages as on February 2006 of the employees for a period of three years from the date of lifting of the Lockout. 4. That the workmen and their union agree that the Canteen will be run on "No Profit No Loss basis" by a Contractor as per Factories Act. Management shall not give any subsidy what so ever. 5. That in terms of the agreement dated 24.07.2006 with regard to pending ACO lying in the name of workmen till December 2005, it is agreed that the ACO amount shall be adjusted from the workmen's earned monthly wages @ Rs. 1000/- per month, effective from the date of the lifting of the lockout. It is however, clarified that no adjustment of ACO will be made from the amount paid to the Laid Off workmen from their LOC. 6. That workmen and the union agree that while making full & final payment at the time of severance for any reason whatsoever of any work....
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....mployment (Standing Orders) Act, 1946. This document has not been specifically denied in the rejoinder affidavit filed by the petitioner-company. The provisions of lay-off of workmen, payment of compensation, and maintenance of muster rolls are mentioned in clauses 19, 20 and 21 respectively of the aforesaid Standing Orders. They are quoted below:- "19. LAY OFF OF WORKMEN : Lay off will have the same meaning as given in Section 2 of U.P. Industrial Disputes Act, 1947. The employer may at any time or times in the event of fire, catastrophy, breakdown of machinery or stoppage of the power supply, epidemic, civil commotion or any other causes whether of a like nature or not, beyond the control of employer, stop any machine or machines or department or departments, wholly or partly, for any period or periods, and lay off of the workmen. The employer shall not be liable to pay compensation to the laid off workmen if the lay off is for reasons beyond the control of employer. Provided that it shall be lawful for the employer to retrench the workman in accordance with the provisions contained in section 6-N of the U.P. Industrial Disputes Act, 1947, at any time after the expiry of ....
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....mployer has powers to lay-off workmen in the eventualities mentioned therein for any period or periods and the employer is not liable to pay compensation to the laid off workmen, if the layoff is for reasons beyond the control of the employer. It is provided therein that it would be lawful for the employer to retrench the workmen in accordance with the provisions contained in Section 6-N of the U.P. Act at any time after the expiry of the first 45 days of lay-off, and when he does so, any compensation, if paid to the workmen, for having been laid off during the preceding 12 months, may be set off against the compensation for retrenchment. A perusal of the terms of the settlement dated 13.04.2007, reveals that contrary to the Standing Order aforesaid, no period of lay-off has been specified therein. On the face of it, the settlement purports to keep the workers laid-off indefinitely and that too on a meagre lay-off compensation, and even that, as is recorded by the Industrial Tribunal, has not been paid. There was no material on record before the Industrial Tribunal on behalf of the petitioner-company to demonstrate that the laid-off workmen were paid compensation in accordance wit....
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....is no denial that out of the work force of 3000, about 2500 are members of the petitioner-Union......". However, in the present case, after considering the evidence, the Industrial Tribunal has recorded that only 743 workmen were members of LMLKS whereas at the time of the settlement, 2800 workmen were employed. A perusal of the record reveals that no perversity is attributable to this observation of the Industrial Tribunal. However, the observation of the Industrial Tribunal that the lay-off being based on the crisis of lack of working capital is against the provision of Section 2(n) of the U.P. Act, is not correct. The phrase "for other reason" appearing in Section 2(n) and the phrase "any other causes whether of a like nature or not, beyond the control of employer" appearing in clause 19 of the Standing Orders, are wide enough to cover the lay-off made by the petitioner-Company. Nevertheless, this observation of the Tribunal would not have bearing on the finding of the Tribunal that the layoff was unjustified and illegal. Paragraph no.14 of the judgement of Parry and Company Ltd. (supra) has been relied upon by the learned Senior Counsel for the petitioner-company to contend t....
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....any Ltd., which is as follows:- "10. The conclusion reached by the Tribunal that the settlement was not just and fair is again unsustainable. As earlier pointed out, the Tribunal itself found that there was nothing wrong with the settlement in most of its aspects and all that was necessary was to marginally increase the additional daily wage. We are clearly of the opinion that the approach adopted by the Tribunal in dealing with the matter was erroneous. If the Settlement had been arrived at by a vast majority of the concerned workers with their eyes open and was also accepted by them in its totality, it must be presumed to be just and fair and not liable to be ignored while deciding the reference merely because a small number of workers (in this case 71 i.e. 11.18 per cent) were not parties to it or refused to accept it, or because the Tribunal was of the opinion that the workers deserved marginally higher emoluments than they themselves thought they did. A settlement cannot be weighed in any golden scales and the question whether it is just and fair has to be answered on the basis of principles different from those which come into play when an industrial dispute is under adjudi....
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....od that is in force, there is always a likelihood of further advances in the shape of improved emoluments by voluntary settlement avoiding friction and unhealthy litigation. This is the quintessence of settlement which courts and tribunals should endeavour to encourage. It is in that spirit the settlement has to be judged and not by the yardstick adopted in scrutinising an award in adjudication. The Tribunal fell into an error in invoking the principles that should govern in adjudicating a dispute regarding dearness allowance in judging whether the settlement was just and fair. * * * It is not possible to scan the settlement in bits and pieces and hold some parts good and acceptable and others bad. Unless it can be demonstrated that the objectionable portion is such that it completely outweighs all the other advantages gained the Court will be slow to hold a settlement as unfair and unjust. The settlement has to be accepted or rejected as a whole and we are unable to reject it as a whole as unfair or unjust. Even before this Court the 3rd respondent representing admittedly the large majority of the workmen has stood by this settlement and that is a strong factor which it is dif....
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....on is a summary record of proceeding of the hearing held on 08.05.2007 before the bench of the BIFR which reflects that the BIFR was satisfied that the petitioner-company had become a sick industrial company as on 31.08.2006 and had declared it to be so. The BIFR then appointed IDBI as the operating agency with directions to prepare a revival scheme for the petitioner-company, if feasible. The recital of the memorandum of settlement dated 13.04.2007, also reflects that the petitioner-Company was in precarious financial condition. It, therefore, appears that various unsuccessful efforts were made by the petitioner-company for revival of the Unit. Though the respondent-Union had successfully staked its claim before the Industrial Tribunal regarding the invalidity of the lay-off made pursuant to the settlement dated 13.04.2007, however, the recitals made in the settlement aforesaid with regard to the financial condition of the petitioner-company, as well as the fact that the company was declared sick by the BIFR, have not been disputed by the respondent-Union. In the case of Surendra Kumar Verma (supra), which has been relied upon by the learned counsel for the petitioner-company, th....
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....ship may be caused to an employer but we must remember that, more often than not, comparatively far greater hardship is certain to be caused to the workmen if the relief is denied than to the employer if the relief is granted." In the present case, the petitioner-company is under liquidation by the order of the NCLT as the Resolution Plan was rejected by the Committee of Creditors. The assets of the petitioner-company are being liquidated. It is not that the petitioner-company is continuing with its business or production, and that in that eventuality it would place an impossible burden on the employer if it is saddled with the liability of payment of back wages, etc. Under the facts and circumstances of the present case, the petitioner-company being under liquidation, the plea for remission of the back wages for reason of 'impossible burden on the employer' cannot be acceded to. It is for the Liquidator to assess the claims of the workmen also taking into account the impugned award of the Industrial Tribunal. Thereafter the proceeds from the sale of the liquidated assets can be distributed in accordance with the Code. Therefore, the judgement of Surendra Kumar Verma (supr....
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....quota, concession, clearances or a similar grant or right during the moratorium period; (2) The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period. (2A) Where the interim resolution professional or resolution professional, as the case may be, considers the supply of goods or services critical to protect and preserve the value of the corporate debtor and manage the operations of such corporate debtor as a going concern, then the supply of such goods or services shall not be terminated, suspended or interrupted during the period of moratorium, except where such corporate debtor has not paid dues arising from such supply during the moratorium period or in such circumstances as may be specified. (3) The provisions of sub-section (1) shall not apply to - (a) such transactions, agreements or other arrangements as may be notified by the Central Government in consultation with any financial sector regulator or any other authority; (b) a surety in a contract of guarantee to a corporate debtor. (4) The order of moratorium shall have effect from the date of such order till t....
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....h law, whichever is later: Provided that where the resolution plan contains a provision for combination, as referred to in section 5 of the Competition Act, 2002, the resolution applicant shall obtain the approval of the Competition Commission of India under that Act prior to the approval of such resolution plan by the committee of creditors." Liquidation of the corporate debtor is initiated under Section 33 and a Liquidator is appointed under Section 34 of the Code. Sections 33 of the Code are as follows: "33. Initiation of liquidation.- (1) Where the Adjudicating Authority, - (a) before the expiry of the insolvency resolution process period or the maximum period permitted for completion of the corporate insolvency resolution process under section 12 or the fast track corporate insolvency resolution process under section 56, as the case may be, does not receive a resolution plan under sub-section (6) of section 30; or (b) rejects the resolution plan under section 31 for the noncompliance of the requirements specified therein, it shall- (i) pass an order requiring the corporate debtor to be liquidated in the manner as laid down in this Chapter; (ii) issue a public announ....
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....t when the business of the corporate debtor is continued during the liquidation process by the liquidator. Sub-section (4) of Section 36 of the Code excludes from the liquidation estate assets, those assets which shall not be used for recovery in the liquidation. Sub-section (4) of Section 36 of the Code reads as follows: "(4) The following shall not be included in the liquidation estate assets and shall not be used for recovery in the liquidation:- (a) assets owned by a third party which are in possession of the corporate debtor, including- (i) assets held in trust for any third party; (ii) bailment contracts; (iii) all sums due to any workman or employee from the provident fund, the pension fund and the gratuity fund; (iv) other contractual arrangements which do not stipulate transfer of title but only use of the assets; and (v) such other assets as may be notified by the Central Government in consultation with any financial sector regulator; (b) assets in security collateral held by financial services providers and are subject to netting and set-off in multi-lateral trading or clearing transactions; (c) personal assets of any shareholder or partner of a corpor....
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....eding the liquidation commencement date; (ii) debts owed to a secured creditor for any amount unpaid following the enforcement of security interest; (f) any remaining debts and dues; (g) preference shareholders, if any; and (h) equity shareholders or partners, as the case may be. (2) Any contractual arrangements between recipients under sub-section (1) with equal ranking, if disrupting the order of priority under that sub-section shall be disregarded by the liquidator. (3) The fees payable to the liquidator shall be deducted proportionately from the proceeds payable to each class of recipients under sub-section (1), and the proceeds to the relevant recipient shall be distributed after such deduction. Explanation.- For the purpose of this section- (i) it is hereby clarified that at each stage of the distribution of proceeds in respect of a class of recipients that rank equally, each of the debts will either be paid in full, or will be paid in equal proportion within the same class of recipients, if the proceeds are insufficient to meet the debts in full; and (ii) the term "workmen's dues" shall have the same meaning as assigned to it in section 326 of the Compani....
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....idation order passed by the NCLT on 23.3.2018, the order of moratorium passed under Section 14 ceased to have effect. Accordingly, further proceedings in the pending adjudicating case before the Industrial Tribunal was not barred after the order of liquidation passed by the NCLT. Under Section 238 of the Code, the provisions of the Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. Therefore, the distribution of the proceeds from the sale of liquidation assets are to be distributed in the order of priority as provided under Section 53 of the Code after determination of the claims by the Liquidator. The priority of distribution of the proceeds from the sale of the liquidation assets pertaining to workmen's dues for the period of 24 months preceding the liquidation commencement date rank equally with the debts owed to a secured creditor where the secured creditor has relinquished security, in view of clause (b) of subsection( 1) of Section 53 of the Code. Only workmen's dues for a period of 24 months preceding the liquidation commencement da....
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.... of the Industrial Disputes Act, 1947 (14 of 1947); (ii) all accrued holiday remuneration becoming payable to any workman or, in the case of his death, to any other person in his right on the termination of his employment before or by the effect of the winding up order or resolution; (iii) unless the company is being wound up voluntarily merely for the purposes of reconstruction or amalgamation with another company or unless the company has, at the commencement of the winding up, under such a contract with insurers as is mentioned in section 14 of the Workmen's Compensation Act, 1923 (19 of 1923), rights capable of being transferred to and vested in the workmen, all amount due in respect of any compensation or liability for compensation under the said Act in respect of the death or disablement of any workman of the company; (iv) all sums due to any workman from the provident fund, the pension fund, the gratuity fund or any other fund for the welfare of the workmen, maintained by the company; (c) "workmen's portion'', in relation to the security of any secured creditor of a company, means the amount which bears to the value of the security the same proportion....