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TMI Blog2010 (8) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... of the observations of the Supreme Court, it must be held that the applicant’s dues do not have priority over the dues which fall within the ambit of section 529A of the Companies Act, 1956. X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1963 which came into effect on 1-4-1999. Section 26B reads as under :-- "26B. Tax payable to be first charge on the property.--Notwithstanding anything to the contrary contained in any other law for the time being in force, any amount of tax, penalty, interest and any other amount, if any, payable by a dealer or any other person under this Act, shall be the first charge on the property of the dealer, or such person." 5. Mr. J.P. Sen, the learned counsel appearing on behalf of the Official Liquidator, submits that in view of the provisions of sections 529, 529A and 530 of the Companies Act, 1956, the dues of the applicant qua a company- in-liquidation cannot take priority over those of the secured creditors and workmen. Sections 529(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 pari passu with such dues, shall be paid in priority to all other debts. (2) The debts payable under clause (a ) and clause (b) of sub-section (1) shall be paid in full, unless the assets are insufficient to meet them, in which case they shall abate in equal proportions. 530. Preferential payments.--(1) In a winding up, subject to the provisions of section 529A, there shall be paid in priority to all other debts-- ( a)all revenues, taxes, cesses and rates due from the company to the Central or a State Government or to a local authority at the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gulation) Act, 1957, section 30 of the Gift-tax Act, 1958 and section 529A of the Companies Act, 1956 are some of the Central legislations by which statutory first charge has been created in favour of the State or workers. . . ." [Emphasis supplied] 9. The Supreme Court held that there was no provision in the DRT Act and the Securitisation Act by which the first charge has been created in favour of the Banks, Financial Institutions or the secured creditors on the property of the borrower. To that extent, the appellant's case qua these Acts, was not accepted. In paragraphs 126, 129, 130 and 131 of the judgment, the Supreme Court held as under :-- "126. While enacting the DRT Act and Securitisation Act, Parliament was aware of the law laid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Companies Act, 1956 would have been incorporated in the DRT Act and Securitisation Act. 130. Undisputedly, the two enactments do not contain provision similar to Workmen's Compensation Act, etc. In the absence of any specific provision to that effect, it is not possible to read any conflict or inconsistency or overlapping between the provisions of the DRT Act and Securitisation Act on the one hand and section 38C of the Bombay Act and section 26B of the Kerala Act on the other and the non obstante clauses contained in section 34(1) of the DRT Act and section 35 of the Securitisation Act cannot be invoked for declaring that the first charge created under the State legislation will not operate qua or affect the proceedings initiated by b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o section 529A of the Companies Act, 1956, that the Supreme Court negated the appellant's contentions. In fact in paragraph 131, the Supreme Court held that the Court could have given effect to the non obstante clauses contained in the DRT Act and the Securitisation Act vis-a-vis section 26B of the Kerala General Sales Tax Act, 1963 only if there was a specific provision in the two enactments creating the first charge in favour of the secured creditors. It is only because Parliament had not made such provision in the said two enactments, that it was held that the first charge created by the State Legislation could not be destroyed by implication or inference. 10. The debtor in the present case is a company-in-liquidation and the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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