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TMI Blog2022 (4) TMI 1257X X X X Extracts X X X X X X X X Extracts X X X X ..... ew of Section238 of the Code, the Code will override anything inconsistent contained in any enactment, including the Minimum Wages Act, 1948. The Code provides for distribution of workmen's due from the liquidation assets in the order of priority. The workmen's dues, as adjudicated by the Controlling Authority under the Minimum Wages Act, 1948, has to be distributed from the liquidation assets in the order of priority as provided under Section 53 of the Code. Ext.P3 order is not in breach of the provisions of the Code - The liquidation process and the distribution of assets are not over and there is no bar under Section 38 of the Code to receive the claim under Ext.P3. Section 38 does not curtail the power of the Liquidator to distribute the dues out of liquidation process till the distribution of assets. There are no reason to interfere with Ext.P3 order of the Controlling Authority under the Minimum Wages Act, 1948, except to the extent of directing the petitioner to deposit the amount ordered therein within 30 days of the order. The amount directed to be paid in Ext.P3 shall be paid by the petitioner in the order of priority as provided under Section 53 (1) (f) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e shall override all other laws for the time being in force in India including the Minimum Wages Act, and therefore, Ext.P3 order passed by the Controlling Authority under the Minimum Wages Act, 1948 is without jurisdiction. Section 238 of the Code is extracted hereunder: 238. Provisions of this Code to override other laws:- The provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. 6. It is also contended by the petitioner that, as per Section 33(5) of the Code, after Ext.P1 liquidation order, no suit or legal proceedings can be instituted against the Corporate Debtor. Section 33 of the Code is extracted hereunder:- 33. Initiation of liquidation:- 33. (1) Where the Adjudicating Authority, - (a) before the expiry of the insolvency resolution process period or the maximum period permitted for completion of the corporate insolvency resolution process under section 12 or the fast track corporate insolvency resolution process under section 56, as the case may be, does not receive a resolution plan under sub-sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. It is further contended that, even if the Controlling Authority is having jurisdiction to institute proceedings against the Corporate Debtor, the amount directed to be paid in Ext.P3, being the dues to the employees prior to 15.01.2018, the same cannot be ordered to be distributed from the liquidation assets in terms of Section 53(1) of the Code. Hence, the petitioner contends that Ext.P3 order is issued without jurisdiction or authority. Section 53 of the Code is extracted hereunder:- 53.Distribution of Assets:- 53. (1) Notwithstanding anything to the contrary contained in any law enacted by the Parliament or any State Legislature for the time being in force, the proceeds from the sale of the liquidation assets shall be distributed in the following order of priority and within such period and in such manner as may be specified, namely :- (a) the insolvency resolution process costs and the liquidation costs paid in full; Secured creditor in liquidation proceedings. Distribution of assets. (b) the following debts which shall rank equally between and among the following :- (i) workmen's dues for the period of twenty-four months preceding the liquidat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and therefore, the bar under Section 33(5) of the Code will not operate. Since the liquidation proceedings is a subsequent development after filing the claim petition, the 2nd respondent contends that the Controlling Authority is competent to pass Ext.P3 order. 9. M/s. Orieon Kuries and Loans Private Limited was undergoing Corporate Insolvency Resolution Process (CIRP) since 10.07.2017 and upon failure to resolve the insolvency, the NCLT, in exercise of the powers under Section 33 (1) (a) of the Code, by Ext.P1 order dated 15.01.2018, ordered liquidation of the Corporate Debtor. The moratorium which was in force from 10.07.2017 ceased to have effect from 15.01.2018. Under Section 14(1) (a) of the Code, on declaration of moratorium, the institution of suits or continuation of pending suits or proceedings against the Corporate Debtor is prohibited. With the passing of Ext.P1 order, the moratorium ceased to have effect. As per Section 33(5) of the Code, after Ext.P1 liquidation order, no suit or legal proceedings can be instituted against the Corporate Debtor. Under Section 33 (5), unlike Section 14(1) (a), there is no prohibition for continuance of already instituted suits and p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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