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;
(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
liquidation commencement date; and
(ii) debts owed to a secured creditor in the event such secured creditor has
relinquished security in the manner set out in section 52;
(c) wages and any unpaid dues owed to employees other than workmen for the
period of twelve months preceding the liquidation commencement date;
(d) financial debts owed to unsecured creditors;
(e) the following dues shall rank equally between and among the following:-
(i) any amount due to the Central Government and the State Government
including the amount to be received on account of the Consolidated Fund of
India and the Consolidated Fund of a State, if any, in respect of the whole
or any part of the period of two years preceding the liquidation
commencement date;
(ii) debts owed to a secured creditor for any amount unpaid following the
enforcement of security interest;
(f) any remaining debts and dues;
(g) preference shareholders, if any; and
(h) equity shareholders or partners, as the case may be.
(2) Any contractual arrangements between recipients under sub-section (1)
with equal ranking, if disrupting the order of priority under that
sub-section shall be disregarded by the liquidator.
(3) The fees payable to the liquidator shall be deducted proportionately
from the proceeds payable to each class of recipients under sub-section (1),
and the proceeds to the relevant recipient shall be distributed after such
deduction.
Explanation.-For the purpose of this section-
(i) it is hereby clarified that at each stage of the distribution of
proceeds in respect of a class of recipients that rank equally, each of the
debts will either be paid in full, or will be paid in equal proportion
within the same class of recipients, if the proceeds are insufficient to
meet the debts in full; and
(ii) the term "workmen's dues" shall have the same meaning as assigned to it
in section 326 of the Companies Act, 2013.