No priority for workers’ dues after liquidation of the company under IBC: Supreme Court

No priority for workers' dues after liquidation of the company under IBC: Supreme Court!

Supreme Court in Moser Baer Karamchari Union vs. Union of India [Writ Petition (C) No. 421 of 2019] on May 2, 2023, observed that the workmen dues will not get priority over other debts in case of liquidation of a company under the Insolvency and Bankruptcy Code, 2016 (“IBC“). The Court clarified that merely because under the earlier regime and in case of winding up of a company under the Companies Act, 1956/2013, the dues of the workmen may have pari passu with that of the secured creditor, the petitioner cannot claim the same benefit in case of winding up/liquidation of the company under the IBC. The parties shall be governed by the provisions of Section 53 of the IBC and other provisions of the IBC.

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