Companies Act, 1956

Section - 123 - Payments of certain debts out of assets subject to floating charge in priority to claims under the charge

Payments of certain debts out of assets subject to floating charge in priority to claims under the charge.

123. (1) Where either—

         (a)  a receiver is appointed on behalf of the holders of any debentures of a company secured by a floating charge; or

         (b)  possession is taken by or on behalf of those debenture holders of any property comprised in or subject to the charge;

then, if the company is not at the time in course of being wound up, the debts which in every winding up are, under the provisions of Part VII relating  to preferential payments, to be paid in priority to all other debts, shall be paid forthwith out of any assets coming to the hands of the receiver or other person taking possession as aforesaid in priority to any claim for principal or interest in respect of the debentures.

(2) In the application of the provisions aforesaid, shall be construed as if the provision for payment of accrued holiday remuneration becoming payable on the termination of employment before or by the effect of the winding up order or resolution were a provision for payment of such r .... To read the full section download the app from Google Play store