Dear Sir(s),
Kindly advise that in case a company closes down, who will receive their payments and at what rate:
- Central Government Statutory dues
- State Government Statutory dues
- Employees' Salary & other emoluments
- Suppliers
- Bankers
Thank you in advance.
Mahesh Khandelwal
+91 8017099070
From India, Calcutta
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1Kindly advise that in case a company closes down, who will receive their payments and at what rate:
- Central Government Statutory dues
- State Government Statutory dues
- Employees' Salary & other emoluments
- Suppliers
- Bankers
Thank you in advance.
Mahesh Khandelwal
+91 8017099070
From India, Calcutta
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Please refer to sec. 529-A and 530 of the Companies Act, 1956. See also the judgment of the Hon'ble Supreme Court in Bank of Maharashtra v Pandurang Keshav Gorwardkar & Others [2013(4) ABR 390].
If the Company registered under the Companies Act is closed down consequent to the winding-up orders passed by the Company Law Court and an Official Liquidator has been appointed, the workers and the secured creditors would be paid in full unless the assets are insufficient to meet them, in which case they shall abate in equal proportions.
However, while deciding the question of the priority of dues in EPF Commissioner v Official Liquidator of Esskay Pharmaceuticals, the Supreme Court decided in favor of the dues to EPFO based on the premise that the EPF Act is a welfare legislation.
From India, Salem
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If the Company registered under the Companies Act is closed down consequent to the winding-up orders passed by the Company Law Court and an Official Liquidator has been appointed, the workers and the secured creditors would be paid in full unless the assets are insufficient to meet them, in which case they shall abate in equal proportions.
However, while deciding the question of the priority of dues in EPF Commissioner v Official Liquidator of Esskay Pharmaceuticals, the Supreme Court decided in favor of the dues to EPFO based on the premise that the EPF Act is a welfare legislation.
From India, Salem
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Please refer to the insolvency and bankruptcy code, which has been implemented in December 2016.
Earlier, government dues were considered a priority over everything else. Now, employee dues (covered under the Payment of Wages Act) are the first priority, along with banks and financial institutions. Other employees are now considered at the next level of priority, which is equal to normal creditors as well as government dues.
From India, Mumbai
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Earlier, government dues were considered a priority over everything else. Now, employee dues (covered under the Payment of Wages Act) are the first priority, along with banks and financial institutions. Other employees are now considered at the next level of priority, which is equal to normal creditors as well as government dues.
From India, Mumbai
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