The waterfall mechanism under Section 53 of the Insolvency and Bankruptcy Code is a rigid statutory framework where priority is determined by the nature and age of dues relative to the liquidation date; judicial crystallization of old claims does not override the statutory time limits for priority classification.

PRONOUNCEMENT OF ORDER

Delivered on 15/04/2026

The case is fixed for pronouncement of the order.

The order is pronounced in open Court vide separate sheet.

Sd/- Sd/-

MAN MOHAN GUPTA BRAJENDRA MANI TRIPATHI

MEMBER (TECHNICAL) MEMBER (JUDICIAL)

Tomar

NATIONAL COMPANY LAW TRIBUNAL

BENCH AT INDORE

IA/140(MP)2024

IN

TP 179 of 2019

[CP(IB)/532(MP)2019]

[An Application filed under Section 60(5) of the IBC, 2016 r.w. Rule 11 of the NCLT Rules, 2016 ]

1. Engineer & Electrical Goods

Majdoor Sangh, Through its

President Radheshyam C. Verma,

9/4, Khari Bawdi, Dewas,

Madhya Pradesh-455001 ......Applicant No.1

Vs

1. Mr. Naveen Khandelwal,

Liquidator of

M/s Gajra Bevel Gears Limited

Address: 206, Navneet Plaza,

5/2 Old Palasia,

Indore-452001 ......Respondent No. 1

2. M/s Abhimanyu Agro Private Limited,

6, Race Course Road,

Indore-452001 ......Respondent No. 2

3. Madhya Pradesh Finance Corporation,

"Finance House", Agra Bombay Road,

Indore-452001 ......Respondent No. 3

4. M/s Rani Agro Private Limited,

395-A, Village Lohar Pipaliya,

A.B. Road, Dewas,

Madhya Pradesh-455001 ......Respondent No. 4

Appearance:

For the Applicant : Mr. Kuldeep K. Adesara, Adv

For the Respondent : Mr. Rohit Dubey, Adv

O R D E R

1. This is an Application under Section 60(5) of the IBC, 2016 r.w. Rule 11 of the NCLT Rules, 2016 , with the following prayers:

i. This Hon'ble Adjudicating Authority may be pleased to pass an order under Section 60(5) of the Code read with Rule 11 of NCLT Rules, 2016 to hold and declare and direct the Liquidator that the claims of the Workers amounting to the tune of Rs. 29,70,31,503/- be admitted u/s 53(1)(b)(i) of I.B. Code, 2016 against the same being admitted u/s 53(f) of I.B. Code, 2016 by Liquidator and further hold and declare and direct the Liquidator that the claims of Employees admitted to the tune of Rs. 1,60,21,780/- be admitted u/s 53(c) of 1.B. Code, 2016 against the same being admitted u/s 53(f) of 1.B. Code, 2016;

ii. This Hon'ble Adjudicating Authority may be pleased to hold and declare that the claims of the Workers ought to be admitted u/s 53(1)(b)(i) of I.B. Code, 2016 and claims of Employees ought to be admitted u/s 53(c) of I.B. Code, 2016 in priority over the claims of the Unsecured Creditor admitted u/s 53(d) as the claims of the Workers and Employees are made under Regulation 19(3)(b)(iii) of the Insolvency and Bankruptcy (Liquidation Process) Regulations, 2016 on the basis of RRCs orders passed since January 2008 for the debts due since January 2007;

iii. This Hon'ble Adjudicating Authority be pleased to direct the Liquidator for transferring back the amount of the sale proceeds distributed to Unsecured Creditor M/s Abhimanyu Agro Private Limited and distributed to Madhya Pradesh Financial Corporation and M/s Rani Agro Private Limited in absence of the same being stakeholders of Corporate Debtor after holding that the claims of the Workers and Employees are required to be distributed in priority over the claims of Unsecured Creditors admitted u/s 53(d) of 1.B. Code, 2016;

iv. This Hon'ble Adjudicating Authority be pleased to seek clarification from the Liquidator for the distribution of the amount of sale proceeds received from the successful bidder to Madhya Pradesh Financial Corporation to the tune of Rs. 5,29,27,707/- and M/s Rani Agro Private Limited to the tune of Rs. 54,37,440/- aggregating to an amount of Rs. 5,83,65,147/- over the claims of the Workers and Employees admitted when the same are not the stakeholders to the class of stakeholders mentioned in the 19th SCC meeting held by the Liquidator on 09/02/2024;

v. This Hon'ble Adjudicating Authority be pleased to stay the closure of the Liquidation process of t