Priority between provident fund dues and secured debt must be decided after impleading all necessary parties and hearing rival claims.

Competing claims over sale proceeds of mortgaged property required the High Court to first hear all necessary parties before deciding priority between provident fund dues and secured debt. The Supreme Court noted that the secured creditor had not been impleaded before the High Court, although it was later heard in appeal. It directed that the rival claims of first charge and statutory priority under the relevant provident fund and securitisation provisions be examined after impleading the secured creditor and allowing exchange of pleadings and hearing. The impugned order was set aside and the writ petition remanded for fresh decision in accordance with law.

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Issues: Whether the writ petition should be restored for fresh consideration after impleading the secured creditor and determining the inter se priority between provident fund dues and the secured debt.

Analysis: The dispute involved competing claims between the provident fund authority and secured creditors over the sale proceeds of mortgaged properties. The secured creditor was not impleaded before the High Court, though it was later heard in the appeal. The Court held that the High Court should first examine the rival claims of first charge and priority under the relevant provident fund and securitisation provisions, after all necessary parties are impleaded and given an opportunity to exchange pleadings and be heard.

Conclusion: The impugned order was set aside and the writ petition was remanded to the High Court for fresh decision in accordance with law after impleading the secured creditor.

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