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2019 (5) TMI 1516 - Tri - Insolvency and BankruptcyDistribution of assets - Workmen dues - whether part of liquidation estate assets or not? - Section 53 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- There is a basic flaw in the reasoning adopted by the liquidator Under Section 36(4) (a) (111), the expression 'liquidation estate' has been 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” - Once the sum due to any workman or employee from the provident fund, pension fund and gratuity fund are not constitute a part of the liquidation estate, we fail to understand as to how Section 53 could be invoked along with its explanation. According to Section 53, the proceeds from the sale of the liquidation assets are to be distributed in the manner specified therein. Therefore, the aforesaid amount of the workmen dues cannot be a part of liquidation estate assets. The provident fund dues, pension funds dues and gratuity fund dues are not treated as a part of the liquidation estate and would not, therefore, be recovered by Section 53 of the Code which provides for waterfall mechanism - The liquidator has taken a perverse view by unnecessarily referring to explanation Il of Section 53 and Section 326 of the Companies Act, 2013. - Application allowed.
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