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Issues: Whether damages determined under section 14B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 could be admitted as a preferential claim against a company in liquidation when the recovery certificate under section 8B of that Act was issued after the winding up order.
Analysis: The claim for employer's contribution, being referable to the period prior to the winding up order, was already treated as a preferential claim and admitted under section 530 of the Companies Act, 1956. The dispute concerned only the damages component. Damages may be determined under section 14B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, but recovery cannot be effected unless the authorised officer issues a recovery certificate under section 8B of that Act. Since the recovery certificate was issued after the winding up order, the claim for damages could not be enforced against the assets of the company in liquidation as a preferential claim.
Conclusion: The claim for damages was not admissible and the rejection of that part of the claim was /justified in law, resulting in dismissal of the application.
Ratio Decidendi: A provident fund damages claim becomes enforceable for recovery only upon issuance of the statutory recovery certificate, and if that certificate is issued after the winding up order, the claim cannot be admitted as a preferential claim in liquidation.
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