law: Workmen's Compensation Act, 1923 
  14. Insolvency of employer 
  Where any employer has entered into a contract with any insurers
  
  in respect of any liability under this Act to any workman then in the event of
  
  the employer becoming insolvent or making a compensation or scheme of
  
  arrangement with his creditors or if the employer is a company in the event of
  
  the company having commenced to be wound up the rights of the employer against
  
  the insurers as respects that liability shall notwithstanding anything in any
  
  law for the time being in force relating to insolvency or the winding up of
  
  companies be transferred to and vest in the workman and upon any such transfer
  
  the insurers shall have the same rights and remedies and be subject to the same
  
  liabilities as if they were the employer so however that the insurers shall not
  
  be under any greater liability to the workman than they would have been under
  
  the employer. If the liability of the insurers to the workman is less than the
  
  liability of the employer to the workman the workman may prove for the balance
  
  in the insolvency proceedings or liquidation. Where in any case such as is
  
  referred to in sub-section (1) the contract of the employer with the insurers
  
  to void or voidable by reason of non-compliance on the part of the employer
  
  with any terms or conditions of the contract (other than a stipulation for the
  
  payment of premia) the provisions of that sub-section shall apply as if the
  
  contract were not void or voidable and the insurers shall be entitled to prove
  
  in the insolvency proceedings or liquidation for the amount paid to the workman
  
  : Provided that the provisions of this sub-section shall not apply in any case
  
  in which the workman fails to give notice to the insurers of the happening of
  
  the accident and of any resulting disablement as soon as practicable after he
  
  becomes aware of the institution of the insolvency or liquidation proceedings.
  There shall be deemed to be included among the debts which under
  
  section 49 of the Presidency-towns Insolvency Act 1909 (3 of 1909) or under
  
  section 61 of the Provincial Insolvency Act 1920 (5 of 1920) or under Section
  
  530 of the Companies Act 1956 (1 of 1956) are in the distribution of the
  
  property of an insolvent or in the distribution of the assets of a company
  
  being wound up to be paid in priority to all other debts the amount due in
  
  respect of any compensation the liability where for accrued before the date of
  
  the order of adjudication of the insolvent or the date of the commencement of
  
  the winding up as the case may be and those Acts shall have effect accordingly.
  
  Where the compensation is a half-monthly payment the amount due in respect
  
  thereof shall for the purpose of this section be taken to be the amount of the
  
  lump sum for which the half-monthly payment could if redeemable be redeemed if
  
  application were made for that purpose under section 7 and a certificate of the
  
  Commissioner as to the amount of such sum shall be conclusive proof thereof.
  
  The provisions of sub-section (4) shall apply in the case of any amount for
  
  which an insurer is entitled to prove under sub-section (3) but otherwise those
  
  provisions shall not apply where the insolvent or the company being wound up
  
  has entered into such a contract with insurers as is referred to in sub-section
  
  (1). This section shall not apply where a company is wound up voluntarily
  
  merely for the purposes of reconstruction or of amalgamation with another
  
  company.