Section 326 of the Companies Act, 2013, as substituted by the Eleventh Schedule to the Insolvency and…

Clause (c) of the Explanation to section 326 of the Companies Act, 2013, as substituted by the Eleventh Schedule to the Code, fixes the workmen's portion as the share of the security that the workmen's dues bear to the aggregate of those dues and the debts due to secured creditors. In the Illustration that aggregate is Rs 4,00,000, so "The workmen's portion of the security is, therefore, one-fourth"; comparing the dues with the secured debts alone would wrongly give one-third, and one-fourth is only the result of these figures, not a fixed share. Section 327(7), inserted by the same Schedule, makes sections 326 and 327 inapplicable to a liquidation under the Code.