Workmen's priority claims under company law do not defeat SARFAESI enforcement absent liquidation or pending winding-up proceedings.

Workmen of a company that has not been wound up cannot restrain a secured creditor from proceeding under the SARFAESI Act or claim priority in distribution of sale proceeds. The first and second provisos to section 13(9) of the SARFAESI Act operate only where the company is in liquidation or winding-up proceedings are pending, and section 529A of the Companies Act, 1956 becomes relevant only in that setting. In the absence of a winding-up order or pending winding-up proceedings, workmen's dues do not override the secured creditor's enforcement rights, and statutory remedies under SARFAESI weigh against writ interference.

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Issues: Whether workmen of a company that has not been wound up can object to proceedings initiated by secured creditors under the SARFAESI Act and claim priority in distribution of sale proceeds or other amounts realised under the recovery process.

Analysis: The first and second provisos to section 13(9) of the SARFAESI Act operate only where the company is in liquidation or where winding-up proceedings are pending. Section 529A of the Companies Act, 1956, which gives priority to workmen's dues, becomes relevant in that context. In the absence of any winding-up order or pending winding-up proceedings, the workmen cannot restrain the secured creditor from proceeding against the secured assets, nor can they insist on priority in distribution of the realised amounts. The availability of statutory remedies under the SARFAESI Act also weighs against entertaining the writ petition.

Conclusion: The claim to interfere with the SARFAESI proceedings and to direct payment of workmen's dues was rejected, and the challenge failed.

Final Conclusion: Workmen's priority rights under the Companies Act were held inapplicable until winding-up is ordered or proceedings for winding up are pending, leaving the secured creditor free to proceed under the SARFAESI and recovery statutes.

Ratio Decidendi: Workmen cannot obstruct enforcement by a secured creditor or claim priority in distribution under section 529A of the Companies Act, 1956 unless the company is under liquidation or winding-up proceedings are pending, and the provisos to section 13(9) of the SARFAESI Act apply only in those situations.

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