The question for consideration
before NCLAT was whether the Provident
Fund , Pension Fund and Gratuity Fund come within the meaning of Assets of the
Corporate Debtor for distribution under section 53 of the I & B Code?.
The said question arose when an application
was filed on behalf of the workmen of the Moser Baer India Limited which was
under liquidation. As per the
liquidator explanation section 53 of IBC defines “workmen dues” as having
the same meaning as that assigned under section 326 of the Companies Act, 2013
and hence as per the liquidator gratuity
was to be included in the liquidation estate
assets thus making it an asset of the corporate debtor.
However, NCLAT was of the view
that there has been a flaw in the reasoning provided by the liquidator and quoted
that under section 36(4) (a)(iii) the expression liquidation estate is defined
and it is clarified that all
sums due to any workman or employee from the provident fund, pension fund and
gratuity fund were not to constitute and included in the expression ‘Liquidation Estate Assets ’.
The Tribunal further expressed
that since a sum due to workmen or employee from provident fund pension fund
gratuity fund does not constitute a part of liquidation estate assets the
Tribunal fails to understand how section 53 can be invoked along with its
explanation .( Section 53 states the manner of distribution of the proceeds
from sale of liquidation assets ). Hence
all sums due to any workman employee from the Provident Fund, the Pension Fund
and the Gratuity Fund are excluded from the Liquidation Estate .
The Tribunal also cited example
of NCLT Mumbai Bench in Asset Reconstruction Company ( India )
Limited Vs Precision Fateners Limited wherein a similar view was taken
and it was clarified that where there
would be any deficiency in the Provident
Fund , Pension Fund and Gratuity Fund then the liquidator must ensure that the
fund is made available in the aforesaid accounts even if their employer has not
diverted the said amount .
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