Payment of Gratuity to the employees - The question of ...

Liquidators Must Ensure Gratuity Payments During Insolvency, Even Without Separate Gratuity Funds; Section 53(1) Not Applicable.

August 22, 2020

Case Laws     Insolvency and Bankruptcy     AT

Payment of Gratuity to the employees - The question of distribution of the Gratuity Fund in order of priority, provided u/s 53(1) of the Code does not arise. - The Adjudicating Authority erred in giving direction to the Liquidator that, ‘the Liquidator cannot avoid the liability to pay Gratuity to the employees, on the ground, that ‘Corporate Debtor‘ did not maintain separate funds, even if, there is no fund maintained, the Liquidator has to provide sufficient provision for payment of Gratuity to the Applicants according to their eligibility’ - AT

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