Priority of PF Dues in Company Winding Up
Section 11 of the 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.
On the other hand, Section 529A of the Companies Act 1956 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 an overriding effect? The Supreme Court, in its judgment dated 8.11.2011 (copy attached), has held that Section 11 of the PF Act will prevail over Section 529A of the Companies Act, and accordingly, PF dues will get priority over dues of workers and secured creditors.
Regards,
From India, Malappuram
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1446Section 11 of the 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.
On the other hand, Section 529A of the Companies Act 1956 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 an overriding effect? The Supreme Court, in its judgment dated 8.11.2011 (copy attached), has held that Section 11 of the PF Act will prevail over Section 529A of the Companies Act, and accordingly, PF dues will get priority over dues of workers and secured creditors.
Regards,
From India, Malappuram
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Supreme court judgment on bifurcation of PF.pdf
Recent Judgment of Honble Supreme Court on Wage eligible for contribution.pp tx