Section 53(1) in Insolvency And Bankruptcy Code, 2016
(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.
