Statutory first charge under provident fund law prevails over competing winding-up claims and is payable first.

Section 11(2) of the Employees' Provident Funds and Miscellaneous Provisions Act creates a statutory first charge on the establishment's assets and requires employer dues to be paid in priority to other debts notwithstanding any other law. In winding-up proceedings, that priority prevails over competing claims under Section 529A of the Companies Act, 1956 because Section 529A gives priority only within its own scheme and does not displace the EPF Act's overriding mandate. The later Companies Act amendment does not dilute the EPF Act's express priority, so the employer's provident fund dues are payable first.

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Issues: Whether the dues payable by an employer under Section 11(2) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 have priority over the claims of workmen and secured creditors under Section 529A of the Companies Act, 1956 in winding up proceedings.

Analysis: Section 11(2) creates a statutory first charge on the assets of the establishment and declares that the amount due from the employer shall be paid in priority to all other debts notwithstanding anything contained in any other law. Section 529A of the Companies Act, 1956 gives overriding priority to workmen's dues and to secured creditors only to the extent specified in that provision, but it does not create a first charge in favour of secured creditors or indicate an intention to override the EPF Act. Reading the two enactments in light of their object and scheme, the priority under the EPF Act must be given full effect, and the later amendment to the Companies Act cannot dilute that mandate.

Conclusion: The amount due from the employer under Section 11(2) of the EPF Act prevails over the competing claims under Section 529A of the Companies Act, 1956 and is payable first.

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