Dear friends,
Section 11 of PF Act provides that notwithstanding anything to the contrary contained in any other law for the time being in force, PF dues of a company being wound up will get priority over all other dues.
Section 529A of Companies Act 1956 on the other hand provides that notwithstanding anything to the contrary contained in any other law for the time being in force, dues of workers and secured creditors will get priority over other dues of a company in case of winding up.
Now the interesting question is which of these two provisions has over-riding effect? The Supreme Court in its judgement dated 8.11.2011 (copy attached) has held that Section 11 of PF Act will prevail over Section 529A of Companies Act and accordingly PF dues will get priority over dues of workers and secured creditors.
Regards,
Section 11 of PF Act provides that notwithstanding anything to the contrary contained in any other law for the time being in force, PF dues of a company being wound up will get priority over all other dues.
Section 529A of Companies Act 1956 on the other hand provides that notwithstanding anything to the contrary contained in any other law for the time being in force, dues of workers and secured creditors will get priority over other dues of a company in case of winding up.
Now the interesting question is which of these two provisions has over-riding effect? The Supreme Court in its judgement dated 8.11.2011 (copy attached) has held that Section 11 of PF Act will prevail over Section 529A of Companies Act and accordingly PF dues will get priority over dues of workers and secured creditors.
Regards,
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