Workmen Dues Under The Employees Provident Fund Act And The Insolvency Code

Introduction

Section 53 of the Insolvency and Bankruptcy Code, 2016 ("IBC") provides for the order of priority in which the proceeds from the sale of liquidation assets is to be distributed. The Section includes workmen due and the amounts payable to the Central and State government. Section 36(4) of the IBC lists out the assets which are not to be included as part of the liquidation assets and this includes the amounts payable to workmen or employees from provident fund, pension fund and the gratuity fund. Thus, it is relevant to consider if the amount due by way of provident fund, pension fund and the gratuity fund will be included as part of the priority of distribution of liquidation assets as set out in Section 53 of the IBC or will the same be payable in priority to the distribution waterfall as set out under Section 53 of the IBC. This article seeks to examine the judicial interpretation of Section 36 (4) read with Section 53 of the IBC with respect to the