The Supreme Court of India has upheld the order of the National Company Law Appellate Tribunal (“NCLAT”) in the matter of State Bank of India v. Moser Baer Karamachari Union & Anr. (“Moser Baer Case”). In the Moser Baer Case, the NCLAT held that the provident fund, the pension fund and the gratuity fund owed by a corporate debtor to its workmen do not fall within the purview of “liquidation estate” for the purpose of distribution of assets under Section 53 of the Insolvency and Bankruptcy Code, 2016.
Further, the Supreme Court also overruled the order of the NCLAT in the matter of Savan Godiwala v. Apalla Siva Kumar where the NCLAT had held that a liquidator is not required to make payment of gratuity to employees if there is no separate fund for gratuity payments.
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