Priority of dues for sarfaesi over esic dues
Pratik Gupta
(Querist) 13 July 2018
This query is : Open
Hi - There have been many different case laws on this topic, but there seems to be no comprehensive solution. Would really appreciate any clarity on this. The situation is as follows -
1. Factory asset of Company A has been sold to Company B vide SARFAESI Act 2002.
2. Company A has few statutory dues, like ESIC dues. Workmen dues have been cleared by Company B.
3. ESIC claims that it has priority over amount recovered, and has 'legal right' to collect from occupier of property
4. Company A is currently 'under liquidation' (but no order has been passed)
Few questions arise out of this -
1. Can ESIC attach the property of occupier, even if the defaulting company A has not been declared insolvent (it is currently under liquidation).
2. Amendments to SARFAESI 2016 have made it amply clear that dues of workmen and secured creditors are above those of statutory dues and government dues. Is this provision retrospective, and applicable to SARFAESI purchases even before 2016 ?
3. Is there any limitation on recovery of dues by ESIC. They are looking to recover dues payable in 2013, in 2017.
4. Do dues related to land arreas, like VAT, Excise, ESIC etc even exist after asset has been sold vide SARFAESI, or are they only liable to collect before asset is sold.
Would greatly appreciate any clarity on these points.
