29th April 2012 From India , Bangalore
Being a Directors of a Public Ltd Co the onus to clear all
dues should be on the Official Lipudator who has taken
control of all assets of the Co. under liqudation. If
sale proceeds of the company assets are not adequate
to clear statutory liabilities Directors can not be held
liable being limited liability. Pl post your comments.
30th April 2012 From United States , Cambridge
30th April 2012 From India , Bangalore
30th April 2012 From India , Bangalore
After it made losses it was registered with BIFR,
New Delhi. BIFR ordered the co. to be wound up
and High Court confirmed the BFIR order and directed
Official Liquidator to take over all assets of the co.
and liqudate the co. As PF Dept did not file claim
with OL and sale proceeds of assets were not
enough PF dues could not be cleared. Can PF dept.
now claim dues from personal assets of the Directors.
Your comments look to be applicable in case of
Voluntary Liquidation where onus to clear dues is
with owner directors.
1st May 2012 From United States , Cambridge
Keeping "Commercial insolvency" considered, (Section 433 and 434 of Companies Act, 1956) and section 457,
Refer Sections 529A and 530 of the Companies Act, according to the provisions, it is the duty of the liquidator to first clear the dues of the employee before they go to the creditors. And this is being ruled out by the Supreme Court of India recently in 2011.
Supreme Court of India in the year 2011, has ruled out "the FIRST RIGHT OF EMPLOYEES ON THE COMPANY"S FUNDS", if the company undergoes liquidation....
Hence, Arrears payable to financial institutions and the government will be paid only after EPF dues are cleared using the liquidated assets of the company.
"All revenues, taxes, cesses and rates due from the company to the Central or state government or to a local authority, all wages or salary or any employee...and all sums due to any employee from provident fund, a pension fund, a gratuity fund or any other fund for the welfare of the employees maintained by the company are payable in priority to all other debts," the Supreme Court has ruled in a verdict delivered on 8 November 2011. After the amount due from an employer under the EPF Act is paid, the other dues of the workers will be treated on a par with the debts due to secured creditors....
"The EPF Act is a social welfare legislation intended to protect the interest of a weaker section of the society, i.e., the workers employed in factories and other establishments, who have made significant contribution in economic growth of the country. Therefore, a legislation made for their benefit must receive a liberal and purposive interpretation keeping in view the directive principles of state policy contained in Articles 38 and 43 of the Constitution," the court said.
And, Please not that according to the companies Act, all the company assets were disclosed to the liquidator and completely left to his control……
Incase, any property of the company is left with you or the liquidator may call for Fraud…..
Incase, considering that it was completely transparent as to the assets of the company submitted to the liquidator, then the liquidator is further answerable you may call him up to answer in the court of law and you clear yourself to the court that you are out of knowledge and it is the responsibility of the liquidator…………
That is the first scenario, the second part is, Is during the liquidation procedure, the dues relating to the funds are cleared then PF dues are also cleared.
1) Since you have paid the salaries to the employees, that means you have also paid their PF amount... (Since, it will be deducted automatically from their gross pay)
2) When you have already paid your part of PF amount, the company is no more responsible to pay anything in addition to that.
3) Since, the company is not the body which holds the PF amount of the employees and it is the PF department/authority, their PF amount will be pending with the authority.
4) hence, by giving the PF department, the company PF code and the employee dues, it can be recovered from the PF department, because it is the one which is holding the company's/employees' PF amount.
Hence, I suggest you to check out with the concerned PF Department and get the dues cleared of employees. Neither you nor the Company is liable for that, but it is the PF Department. Since, the PF amount is not the assets of the company, the liquidation might not have covered that. Hence, approach the department of PF, present your liquidation details and settle the PF dues of employees.
Hope, I tried to make it clear to you........
1st May 2012 From India , Bangalore