Case of Regional Director vs Manish Kumar, NCLAT Delhi Judgement Dated 24th September 2025. The Liquidator had treated the ESI claim of as that of an operational (unsecured) creditor and allotted a proportionate amount for disbursement according to the priority of payments under IBC. NCLT also considered that ESI dues are not explicitly defined as workmen dues under IBC, and there is no provision it a charge or special status over other operational creditors.
— The ESI argued that Section 36(4)(a)(i) of the IBC stipulates that any assets held by the Corporate Debtor (CD) in trust for any third party do not form part of the liquidation estate. The ESI contributions, which include amounts deducted from employees’ wages and the employer share, are held by the CD in trust by virtue of Section 40(4) of the ESI Act. NCLAT allowed the appeal, setting aside the NCLT’s order and effectively ruling that the ESI amount does not belong to the liquidation estate and must be kept out of the general pool of assets available to creditors.