# In the matter of Moser Baer India LImited (IB)-378(PB)-2017

> NCLT judgment dated 2019-03-19. Citation: TCN-2019-NCLT-04391. The application was filed on behalf of the workmen of Moser Baer India Limited, a company in…

- **Court:** NCLT
- **Order date:** 19 Mar 2019
- **Citation:** TCN-2019-NCLT-04391
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/moser-baer-india-limited-ib-378pb-2017-0ee391c5

## Summary

### Background

The application was filed on behalf of the workmen of Moser Baer India Limited, a company in liquidation. The workmen sought directions to the liquidator to exclude amounts due to them towards provident fund, pension fund, and gratuity fund from the waterfall mechanism under Section 53 of the Insolvency and Bankruptcy Code, 2016, and to pay them these dues. The liquidator argued that gratuity is included as per Section 326 of the Companies Act, 2013, and could be covered by Section 53 to the extent of the balance amount. The arrears due from 01.09.2017 to 20.09.2018 were also sought to be paid.

## Facts

Moser Baer India Limited is undergoing liquidation. The workmen of the company filed an application seeking the exclusion of their provident fund, pension fund, and gratuity fund dues from the waterfall mechanism under Section 53 of the Insolvency and Bankruptcy Code (IBC), 2016. They also sought directions to the liquidator to pay these dues. The liquidator contended that gratuity is included under Section 326 of the Companies Act, 2013, and could be covered by Section 53. The workmen also sought payment of arrears due from 01.09.2017 to 20.09.2018. The court considered Section 36(4)(a)(III) of the IBC, which defines 'liquidation estate' and excludes workmen's dues from it. A co-equal bench of NCLT Mumbai in Asset Reconstruction Company (India) Ltd. v. Precision

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## Issues and analysis

### Issue 1: Whether the provident fund dues, pension fund dues, and gratuity fund dues of the workmen should be …

**Ratio:** Section 36(4)(a)(III) of the Insolvency and Bankruptcy Code, 2016, defines 'liquidation

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**Reasoning:** The court reasoned that since the provident fund, pension fund, and gratuity fund dues

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**Interpretation:** The interpretation of Section 36(4)(a)(III) is crucial. It clearly excludes

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**Application:** In this specific case, the court applied the ratio by holding that the

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## Parties

- **Judges:** M. M. K…; S. K. MOH…
- **Appellants:** Alchemist Asset…
- **Respondents:** Moser Baer India…

## Timeline

- **2017-01-01 — Initiation of Corporate Insolvency Resolution…**: Corporate Insolvency Resolution Process initiated against Moser Baer India Limited…
- **2017-01-01 — Section 7 App…**: Application filed under Section 7 of the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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