Explain workmen's portion in relation to the security of a secured creditor in the winding up process of the company. The value of security of a secured creditor is ₹1,00,000. The total amount of workmen's due is ₹1,00,0

As per explanation to section 326 of the Companies Act, 2013 (Clause c) "workmen's portion", in relation to the security of any secured creditor of a company means the amount which bears to the value of the security the same proportion as the amount of the workmen's dues bears to the aggregate of the amount of workmen's dues and the amount of the debts due to the secured creditors. The value of the security of a secured creditor of a company = ₹1,00,000. The total amount of the workmen's dues = ₹1,00,000. The amount of the debts due from the company to its secured creditors = ₹3,00,000. Aggregate of the amount of workmen's dues and the amount of debts due to secured creditors = ₹(1,00,000 + 3,00,000) = ₹4,00,000. The workmen's portion of the security = (₹1,00,000 * ₹1,00,000) / ₹4,00,000 = ₹25,000/-