Section 19 of The Inchek Tyres Limited and National Rubber Manufacturers Limited (Nationalisation) Act, 1984
The claims arising out of the matters specified in the Second Schedule shall have priorities in accordance with the following principles, namely:--
- (a)Category I shall have precedence over all other categories and Category II shall have precedence over Category III, and so on;
- (b)the claims specified in each of the categories shall rank equally and be paid in full, but, if the amount is insufficient to meet such claims in full, they shall abate in equal proportions and be paid accordingly; and
- (c)the question of discharging any liability with regard to a matter specified in a lower category shall arise only if a surplus is left after meeting all the liabilities specified in the immediately higher category.
Summary
- Claims arising out of the matters specified in the Second Schedule are paid in a strict order of priority.
- Category I claims have the highest priority and take precedence over all other categories.
- Category II claims have precedence over Category III claims, and each successive category has priority over the ones below it.
- All claims falling within the same category rank equally and must be paid in full if funds are sufficient.
- If the available funds are insufficient to pay a category's claims in full, all claims within that specific category are reduced in equal proportions and paid accordingly.
- A lower priority category will only be considered for payment if a surplus of money remains after fully satisfying all the liabilities of the immediately higher category.
Practical examples
FAQ
1. What happens if there is not enough money to pay all the claims in a single category?
All claims within that same category are treated as equal. If the funds are not enough to pay them in full, they will all be reduced by the exact same proportion and paid accordingly.
2. Can a claimant in Category III be paid before Category II is fully satisfied?
No. The Commissioner cannot pay or discharge any liability in a lower category unless there is a surplus left over after fully paying all the liabilities of the immediately higher category.
3. How are the different categories of claims determined?
The priorities and categories are determined strictly by the order and matters listed in the Second Schedule of the Act.
Test yourself
Q1.Under Section 19 of The Inchek Tyres Limited and National Rubber Manufacturers Limited (Nationalisation) Act, 1984, what is the rule if the amount paid to the Commissioner is insufficient to meet all the claims within a specific priority category?
Q2.Under Section 19 of The Inchek Tyres Limited and National Rubber Manufacturers Limited (Nationalisation) Act, 1984, when can a liability listed in a lower priority category be discharged by the Commissioner?
Q3.Under Section 19 of The Inchek Tyres Limited and National Rubber Manufacturers Limited (Nationalisation) Act, 1984, which category of claims in the Second Schedule has the highest precedence and must be paid before all others?
Q4.Under Section 19 of The Inchek Tyres Limited and National Rubber Manufacturers Limited (Nationalisation) Act, 1984, how are claims within the same category treated relative to each other?