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Issues:
Appeal under rule 164 of the Companies (Court) Rules, 1959, read with section 457(3) of the Companies Act of 1956 against the rejection of preferential payment claim by the official liquidator. Condonation of delay in filing the appeal. Interpretation of section 11 of the Employees' Provident Funds Act of 1952 for preferential payment entitlement. Application of General Clauses Act to determine references in repealed and re-enacted provisions. Analysis of re-enactment of section 230 of the Companies Act of 1913 in section 530 of the Companies Act of 1956. Determination of items entitled to preferential payment under section 11 of the Provident Funds Act. Detailed Analysis: The judgment pertains to an appeal filed against the official liquidator's rejection of a preferential payment claim under the Companies Act of 1956. The appellant sought condonation of delay in filing the appeal, citing reasons for the delay. The court accepted one reason for delay and allowed the appeal to proceed despite the delay issue. The core issue revolved around the interpretation of section 11 of the Employees' Provident Funds Act of 1952 concerning preferential payment entitlement. The appellant argued that all claimed items should be entitled to preferential payment under this section. The court analyzed the relevant provisions and determined the applicability of section 11 to the items claimed by the appellant. The court delved into the application of the General Clauses Act to ascertain references in repealed and re-enacted provisions. It examined the re-enactment of section 230 of the Companies Act of 1913 in section 530 of the Companies Act of 1956. The court concluded that references to section 230 in the Provident Funds Act should be construed as references to section 530 of the Companies Act of 1956. Regarding the items claimed, the court found that contributions to the provident fund, penal interest, and administrative charges were entitled to preferential payment under section 11 of the Provident Funds Act. However, legal charges were not clearly supported by the Act or scheme. Consequently, the court allowed the appeal in part, directing payment for all items except legal charges as a debt included in section 530 of the Companies Act of 1956. In conclusion, the court's decision allowed the appeal in part, granting preferential payment for specified items under section 11 of the Provident Funds Act while excluding legal charges. The judgment highlighted the application of statutory provisions and the re-enactment of relevant sections to determine preferential payment entitlement in the context of company liquidation proceedings.
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