MOSER BAER KARAMCHARI UNION THR. PRESIDENT MAHESH CHAND SHARMA vs UNION OF INDIA

The Supreme Court examined the validity of Section 327(7) of the Companies Act, 2013, and its compatibility with Article 21 of the Constitution, in the context of workers' dues under insolvency proceedings. The petitioners challenged the 'waterfall mechanism' under Section 53 of the Insolvency and Bankruptcy Code, 2016, arguing it violates workers' rights to dues. The Court emphasized the need for a purposive interpretation to protect workers' interests and directed that their dues should be prioritized and released without delay. The judgment underscores the importance of safeguarding workers' rights within insolvency frameworks.