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2018 (9) TMI 1532 - Tri - Insolvency and BankruptcyCorporate insolvency process - attachment of movable and immovable properties of the Corporate Debtor - priority of claims - whether the dues payable towards the provident fund of the workmen of the company is to be considered as claim falling within the ambit of Liquidation Estate? - Held that:- Since liquidation process should not get obliterated by the attachment taken against the assets of the Corporate Debtor, the only viable answer to this situation is, the liquidator shall pay the dues that are payable under the head of Provident Fund/Pension Fund/Gratuity Fund earmarking it as asset of the workmen and pay off the same to the respondents in priority to the waterfall mechanism made under section 53 of the Code. In view of the law in force, we hereby hold that by virtue of EPF Act and section 34(4)(a)(iii) of the Code, the charge will remain in force against the assets of the corporate debtor until it has been paid off before making any payment to any entity falling under waterfall mechanism devised under section 53 of the Code. Since the Liquidator filed another MA stating that further attachments have been slapped on the assets of the corporate debtor even after initiation of the Corporate Insolvency Resolution Process (CIRP), it makes no difference whether attachments have been made prior to or subsequent to admission of Company Petition under IB Code, the statutory first charge having remained in force against the assets of the corporate debtor company, we have not seen any merit to differentiate in respect to attachments made prior to filing of the Company Petition and during CIRP period. For the reasons stated above, the Petitioner is directed to pay the Provident Fund dues from the liquidation estate before distributing the liquidation estate of the Corporate Debtor to the claimants, to which, since the Liquidator has to sell the asset of the Corporate Debtor, the respondents are directed to allow this Liquidator to sell the assets of the Corporate Debtor and pay off the Provident Fund dues in priority to all other claims payable by the Corporate Debtor in liquidation. Since the liquidator has not disputed the quantum of Provident Fund dues payable to workmen, the liquidator shall pay the Provident Fund dues along with interest accrued, after selling any of the assets of the Corporate Debtor earlier in point of time. With this direction, the attachments made against the assets of the Corporate Debtor are hereby vacated with a direction against the Liquidator as mentioned above.
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