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TMI Blog2007 (11) TMI 408X X X X Extracts X X X X X X X X Extracts X X X X ..... as to whether the payment of amount of ₹ 6,45,40,834 would still be under the provisions of section 529A, whether it would come beyond the pari passu claim of the workmen and whether the Department still would be entitled to recover the money before settlement of the dues of the secured creditors so also of the workmen. It appears that all these arguments were not raised before the learned Single Judge and the question for making an order on those lines never cropped up before the learned Single Judge. With utmost respect at our command we set aside the judgment/order dated 4-4-2007, passed by the learned Single Judge. As a consequence of this order, we direct respondent No. 3 to deposit back the amount of ₹ 6,45,40,834 with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereafter moved this Court for liquidation of the company. It is also to be noted that up to the year 1998 the workers neither lodged their claim nor respondent No. 3 ever asserted its rights to recover the contribution of the employees or the contribution of the employer by going in appropriate proceedings either under the Companies Act, 1956, or under the provisions of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (for short, the "Provident Funds Act"). 5. At this stage, Shri Gupta submitted that respondent No. 3 had submitted its claim for recovery of the money before the Official Liquidator, who was appointed under the orders of this Court. This statement of Shri Gupta supports what we have recorded earlier. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditors and their further claim is hardly Rs. 2 crores to Rs. 4 crores. He further admitted that an amount of Rs. 32 crores has already been paid in favour of the workers and the workers still have their claim. He also submitted that while making pari passu distribution the claimant coming under section 529 in accordance with the priority fixed under section 529A of the Companies Act would be entitled to his share and the said share would be fixed on the basis of the total claim lodged or is ultimately found receivable by the Company Court. 9. Shri Gupta also relied upon the judgment of the Supreme Court in the matter of ICICI Bank Ltd. v. SIDCO Leathers Ltd. [2006] 131 Comp. Cas. 451 1 , to contend that section 529A is to be under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 530 of the Companies Act. 11. Section 529 relates to the application of insolvency rules in winding up of insolvent companies. It declares as to how the company would be put under winding up, how the money would be realized and how the money would be distributed. However, section 529A controls the rights of the parties and issues a mandate to the court. Section 529A reads as under : "529A. Overriding preferential payments. Notwithstanding anything contained in any other provision of this Act or any other law for the time being in force, in the winding up of a company, ( a )workmen s dues ; and ( b )debts due to secured creditors to the extent such debts rank under clause ( c ) of the proviso to sub-section (1) of section 529 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct fixes the priorities and rights of the parties to some extent or makes it absolute then such provisions of the Act would be applicable but however, if any Act comes into force or operation subsequent to the first Act and later Act starts with a non obstante clause that notwithstanding anything in any other law for the time being in force then the provisions of the subsequent law would override the first law. The Companies Act being Act of 1956 would even otherwise have overriding effect over the provisions of the Provident Funds Act. 16. The judgment in the matter of ICICI Bank Ltd. s case ( supra ), is not an authority or authoritative pronouncement of the Apex Court to show that while fixing and deciding the priorities the work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1882, whether the secured creditors having first charge over the property would be entitled to have priority in comparison to the second charge holder third charge holder or a person who is not a secured creditor. 17. Once it is held that section 529A has effected overriding preferential payment and treats the dues of the workmen and debts due to the secured creditors at par then before entering into any other controversy the Company Court is obliged to see as to whether the amounts already paid or proposed to be paid to the workmen would stand pari passu with the rights of the secured creditors. 18. With due respect to the learned Company Judge, we hold that the learned Single Judge did not see as to whether the payment of amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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