Statutory Charges and Secured Status: Rethinking Priority Claims in IBC Liquidation

This paper examines the statutory priorities in liquidation under the Insolvency and Bankruptcy Code (IBC), 2016, with a focus on the treatment of government dues versus secured creditor claims. Through an analysis of key judicial pronouncements, particularly the Supreme Court's ruling in State Tax Officer v. Rainbow Papers Ltd., and subsequent clarifications in Paschimanchal Vidyut and Sundaresh Bhatt, the paper explores the evolving legal stance on the waterfall mechanism under Section 53. It critically assesses the balance between public interest and creditor rights, highlighting the need for doctrinal consistency and legislative clarity.