TaxTMI 
TaxTMI 
2024 (7) TMI 1762
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....(c) to be read with Section 25(a) of the I & B Code, 2016. By virtue of the application in MA/268/IB/2019 in CP/1056/IB/2018, the Appellant before the Learned Adjudicating Authority has claimed for the following relief, that the attachments which has been made on the Immovable Property of the Corporate Debtor may be lifted in order to enable him to meet the objectives as contemplated under the I&B Code, by auctioning the property, for the purposes of settlement of claims of the claimants as against the Corporate Debtor. 2) At this stage, we are not required to venture into the factual aspects except for the ones which has been argued by the Learned Counsel for the Appellant, that is, the Impugned Order as passed by the Learned Adjudicating Authority suffers from the various vices being (a) incorrect interpretation of the provisions contained under Section 36(4) and 36(4)(a) of I & B Code and (b) holding that the contribution/deductions made, towards ESIC will be in nature of assets coming under 36(4)(a)(i) of I&B Code. He attempts to argue that the legislature with its deliberate intent, while, it was dealing with the aspect of identifying some of the statut....
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....n a priority basis, above all other debts in the event of distribution of assets of a Company being wound up. It shows that Legislature has consciously attached high importance to safeguarding of ESI dues in comparison to other debts in the event of winding up/liquidation of a Company. Further since Section 94 seeks to safeguard the contribution, it cannot be read by the Appellant in exclusion of the definition of 'contribution' as it has been provided under the ESI Act 'Contribution' is defined under Sub Section (4) of Section 2 of the ESI Act, 1948. A surgical interpretation is required to be made of the said definition in order to appreciate the argument of the Appellant, in the context of Section 94 and counter argument of the Learned Counsel for the Respondent in the context of Section 36(4)(a) of I&B Code. The term 'contribution' as defined under Sub Section (4) of Section 2 of the Act is extracted hereunder:- "contribution" means the sum of money payable to the Corporation by the principal employer in respect of an employee and includes any amount payable by or on behalf of the employee in accordance with the provisions of this Act;" Thus, Contribution will mean ....
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.... heads of deductions from the Workmen's wages and salaries which are being made towards benefits of an employee, for example, the Provident Fund, Pensions, Gratuity, etc. from the Liquidation Estate of an employer who has been declared as to be a bankrupt and in view of the extraction made to para 27 of the Joint Committee's Report dated 20th April 2016, he submits that since ESI Act of 1948 has not been included in it, the same cannot be brought in now, by interpretation of statutes, within the list of deductions/contributions made from the wages of the workmen, to be placed outside the ambit of the estates of the Liquidator. There are two reasons for not to accept the argument of the Learned Counsel for the Appellant. The first reason is that the discussion which has taken place and as referred to in Para 3(c) of his written submissions which is with regard to the report of the Joint Committee, it is not for the purpose of the judicial consumption, since not being a statute or a subordinate legislation, as it is exclusively a discussion and deliberation only which has taken place in Lok Sabha. To what conclusion it has been reached, too could only be reflected from the statute bo....
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....the question which arises is as to whether the term "entrusted" as used under Sub Section (4) of Section 40 of the ESI Act (as extracted above) could at all be read to meet the spirit of Section 36 Sub Section 4(a)(i) of I & B Code, Section 36 (4)(a)(i) provides that the certain amounts are not to be included into the assets of the liquidator so as to be made as a part of the liquidation estate and that the said exemptions include within itself, the assets held in trust for any third party. The assets herein would denote to the "deduction" made by the principle employer under the Provisions of the ESI Act, as involved herein in the instant case, and as it would be the contribution or deductions made from the salary of the workmen as deducted by the employer so as to be paid to the Corporation and which is held as a 'trust' for a third party and third party herein would denote the workmen. 10) In that eventuality, the term 'Assets' held in trust' in the Section 36 sub-Section 4(a)(i) of I&B Code would relate back to the provisions of the entrustment which precedes with the deeming clause under Sub-Section (4) of Section 40 of the ESI Act. In that eventuality, where there is a cre....