Payment of Gratuity and Provident Fund to the Operational Creditors and Workmen under the Insolvency and Bankruptcy Code, 2016.

Abstract

The Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) is all inclusive in nature which is enacted with the main intention to decide the insolvency and bankruptcy matters in a simpler and faster way. IBC, 2016 is comprehensive of all the rules and amendments related to insolvency and bankruptcy process in India. The main objective of this statute is to maximize the value of assets of the Corporate Debtor and to help the financially deficient companies to improve their business. Workmen and employees, working in a company, are among the individuals who are protected by the provisions of IBC, 2016. However, the statute does not explicitly provide how all the elements included in the remuneration of the workmen and employees should be dealt with after the initiation of the Corporate Insolvency Resolution Process (“CIRP”) under the IBC, 2016. Furthermore, it does not provide any guidelines as to how certain dues owed to the workmen and employees should be treated during the CIRP. The paper analyses deeply the important judgments which have cleared this grey area in determining the payment of dues owed to the workmen and employees by the Corporate Debtor.