Provident fund dues take priority over pledged goods and include interest and damages under the statutory scheme.

Pledged sugar bags remained liable to recovery of provident fund dues because the bank's pledge created only a limited security interest, not ownership, and the employer retained title. The statutory priority attached to provident fund dues therefore prevailed, allowing attachment and sale of the goods. Section 11(2) was also construed broadly to include interest under Section 7-Q and damages under Section 14-B as amounts due from the employer, giving those sums priority over other debts. The bank's status as a secured creditor and the Essential Commodities Act did not alter that priority.

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Issues: (i) whether pledged sugar bags could be attached and sold for recovery of provident fund dues despite the bank's claim under the deeds of pledge; (ii) whether interest under Section 7-Q and damages under Section 14-B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 form part of the amount due from the employer under Section 11(2) and enjoy priority over other debts.

Issue (i): whether pledged sugar bags could be attached and sold for recovery of provident fund dues despite the bank's claim under the deeds of pledge.

Analysis: The deeds of pledge did not transfer ownership of the sugar bags to the bank. The sugar mills retained title, while the bank acquired only a limited security interest. A contract of pledge gives the pawnee special property only to the extent necessary to secure the debt, and the general property remains with the pawnor. The statutory priority given to provident fund dues therefore operated against the pledged goods, and the recovery authorities could proceed against them.

Conclusion: The bank's pledge did not defeat recovery of provident fund dues, and attachment of the sugar bags was valid.

Issue (ii): whether interest under Section 7-Q and damages under Section 14-B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 form part of the amount due from the employer under Section 11(2) and enjoy priority over other debts.

Analysis: The expression "any amount due from the employer" in Section 11(2) was construed broadly in the light of the object of the Act and the scheme of Sections 7-A, 7-Q, 14-B and 15(2). Excluding interest and damages would undermine the statutory mechanism for timely compliance and defeat the non obstante priority created to protect workers' provident fund dues. The provisions of the Essential Commodities Act, 1955 and the fact that the creditor was a scheduled bank did not alter this interpretation.

Conclusion: Interest under Section 7-Q and damages under Section 14-B form part of the amount due from the employer under Section 11(2) and have priority over other debts.

Final Conclusion: The challenge to the High Court's view failed because the earlier precedent squarely governed the dispute and the statutory priority of provident fund dues prevailed over the bank's security claim.

Ratio Decidendi: Under Section 11(2) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, provident fund dues, including interest and damages, constitute a first charge on the employer's assets and have priority over all other debts, including secured claims based on pledge.

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