law: Companies Act, 2013 
  327.
  
    Preferential
  
  payments.
  1.      In a winding up,
  
  subject to the provisions of section 326, there shall be paid in priority to
  
  all other debts,—
  a.     
  
    all
  
  revenues, taxes, cesses and rates due from the company to the Central
  
  Government or a State Government or to a local authority at the relevant date,
  
  and having become due and payable within the twelve months immediately before
  
  that date;
  b.    
  
    all
  
  wages or salary including wages payable for time or piece work and salary
  
  earned wholly or in part by way of commission of any employee in respect of
  
  services rendered to the company and due for a period not exceeding four months
  
  within the twelve months immediately before the relevant date, subject to the
  
  condition that the amount payable under this clause to any workman shall not
  
  exceed such amount as may be notified;
  c.     
  
    all
  
  accrued holiday remuneration becoming payable to any employee, or in the case
  
  of his death, to any other person claiming under him, on the termination of his
  
  employment before, or by the winding up order, or, as the case may be, the
  
  dissolution of the company;
  d.    
  
    unless
  
  the company is being wound up voluntarily merely for the purposes of
  
  reconstruction or amalgamation with another company, all amount due in respect
  
  of contributions payable during the period of twelve months immediately before
  
  the relevant date by the company as the employer of persons under the
  
  Employees’ State Insurance Act, 1948 or any other law for the time being in
  
  force;
  e.     
  
    unless
  
  the company has, at the commencement of winding up, under such a contract with
  
  any insurer as is mentioned in section 14 of the Workmen’s Compensation Act,
  
  1923, rights capable of being transferred to and vested in the workmen, all amount
  
  due in respect of any compensation or liability for compensation under the said
  
  Act in respect of the death or disablement of any employee of the company:
  Provided
  
  that where any compensation under the said Act is a weekly payment, the amount
  
  payable under this clause shall be taken to be the amount of the lump sum for
  
  which such weekly payment could, if redeemable, be redeemed, if the employer
  
  has made an application under that Act;
  a.     
  
  
  b.     
  
  
  c.     
  
  
  d.     
  
  
  e.     
  
  
  f.     
  
    all
  
  sums due to any employee from the provident fund, the pension fund, the
  
  gratuity fund or any other fund for the welfare of the employees, maintained by
  
  the company; and
  g.    
  
    the
  
  expenses of any investigation held in pursuance of sections 213 and 216, in so
  
  far as they are payable by the company.
  1.     
  2.      Where any payment has
  
  been made to any employee of a company on account of wages or salary or accrued
  
  holiday remuneration, himself or, in the case of his death, to any other person
  
  claiming through him, out of money advanced by some person for that purpose,
  
  the person by whom the money was advanced shall, in a winding up, have a right
  
  of priority in respect of the money so advanced and paid-up to the amount by
  
  which the sum in respect of which the employee or other person in his right
  
  would have been entitled to priority in the winding up has been reduced by
  
  reason of the payment having been made.
  3.      The debts enumerated
  
  in this section shall—
  a.     
  
    rank
  
  equally among themselves and be paid in full, unless the assets are
  
  insufficient to meet them, in which case they shall abate in equal proportions;
  
  and
  b.    
  
    so
  
  far as the assets of the company available for payment to general creditors are
  
  insufficient to meet them, have priority over the claims of holders of
  
  debentures under any floating charge created by the company, and be paid
  
  accordingly out of any property comprised in or subject to that charge.
  1.     
  2.     
  3.     
  4.      Subject to the
  
  retention of such sums as may be necessary for the costs and expenses of the
  
  winding up, the debts under this section shall be discharged forthwith so far
  
  as the assets are sufficient to meet them, and in the case of the debts to
  
  which priority is given under clause (d ) of sub-section (1 ), formal
  
  proof thereof shall not be required except in so far as may be otherwise
  
  prescribed.
  5.      In the event of a
  
  landlord or other person distraining or having distrained on any goods or
  
  effects of the company within three months immediately before the date of a
  
  winding up order, the debts to which priority is given under this section shall
  
  be a first charge on the goods or effects so distrained on or the proceeds of
  
  the sale thereof:
  Provided
  
  that, in respect of any money paid under any such charge, the landlord or other
  
  person shall have the same rights of priority as the person to whom the payment
  
  is made.
  1.     
  2.     
  3.     
  4.     
  5.     
  6.      Any remuneration in
  
  respect of a period of holiday or of absence from work on medical grounds
  
  through sickness or other good cause shall be deemed to be wages in respect of
  
  services rendered to the company during that period.
  Explanation. —For the purposes of
  
  this section,—
  a.     
  
    the
  
  expression “accrued holiday remuneration” includes, in relation to any person,
  
  all sums which, by virtue either of his contract of employment or of any
  
  enactment including any order made or direction given there under, are payable
  
  on account of the remuneration which would, in the ordinary course, have become
  
  payable to him in respect of a period of holiday, had his employment with the
  
  company continued until he became entitled to be allowed the holiday;
  b.    
  
    the
  
  expression “employee” does not include a workman; and
  c.     
  
    the
  
  expression “relevant date” means—
                       
  
   i.        
  
    in
  
  the case of a company being wound up by the Tribunal, the date of appointment
  
  or first appointment of a provisional liquidator, or if no such appointment was
  
  made, the date of the winding up order, unless, in either case, the company had
  
  commenced to be wound up voluntarily before that date; and
                      
  
   ii.        
  
    in
  
  any other case, the date of the passing of the resolution for the voluntary
  
  winding up of the company.