127. Payment of certain debts out of assets subject to floating charge in priority to claims under charge

a receiver or manager is appointed on behalf of the holders of any debentures of a VCC secured by a floating charge; or

possession is taken, by or on behalf of holders of debentures of a VCC, of any property of a VCC comprised in or subject to a floating charge,then, if the VCC is not at the time in the course of being wound up, the following:

debts which in every winding up of a VCC are preferential debts and are due by way of wages, salary, retrenchment benefit or ex gratia payment, vacation leave or superannuation or provident fund payments;

any amount which in the winding up of a VCC is payable pursuant to section 203(5) or (7) of the IRDA as applied by section 130,must be —

paid out of any assets coming in to the hands of the receiver or manager or other person taking possession in priority to any claim for principal or interest in respect of the debentures; and

paid in the same order of priority as prescribed by section 203 of the IRDA (as applied by section 130) in respect of those debts and amount.

a receiver or manager is appointed on behalf of the holders of any debentures of a particular sub‑fund of an umbrella VCC secured by a floating charge; or

possession is taken, by or on behalf of holders of debentures of a particular sub‑fund of an umbrella VCC, of any property comprised in or subject to a floating charge,then, if the sub-fund is not at the time in the course of being wound up, the following:

debts which in every winding up of a sub-fund are preferential debts and are due by way of wages, salary, retrenchment benefit or ex gratia payment, vacation leave or superannuation or provident fund payments;

any amount which in the winding up of a sub‑fund is payable pursuant to section 203(5) or (7) of the IRDA as applied by section 33,must be —

paid out of any assets coming in to the hands of the receiver or manager or other person taking possession in priority to any claim for principal or interest in respect of the debentures; and

paid in the same order of priority as prescribed by section 203 of the IRDA (as applied by section 33) in respect of those debts and amount.

a floating charge is a charge which, as created, was a floating charge; and

a reference in section 203(1)(e), (f), (g), (h) and (i) of the IRDA (as applied by section 33 or 130, as the case may be) to the commencement of the winding up is to the date of the appointment of the receiver or manager or of the possession being taken as described in subsection (2) or (3), as the case may be.