Company liquidation priority follows specific statutory priorities, not general Crown debt priority, in winding-up distribution.

Section 229 of the Indian Companies Act was construed as importing insolvency rules on secured and unsecured creditors, provable debts, and valuation of annuities and contingent liabilities, but not the general Crown priority rule. Section 230 was treated as the specific provision governing priorities in winding up, so the special rule prevailed over the general one. On that construction, priority in liquidation was confined to the debts expressly listed in section 230, and the company's assets were otherwise distributable pari passu. A trade debt did not fall within the specific priorities recognised by section 230, so the claim to general Crown priority was rejected.

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Issues: Whether the general priority for Crown debts under insolvency law was incorporated into company winding-up proceedings by section 229 of the Indian Companies Act, or whether priority in winding up was confined to the specific Crown debts mentioned in section 230.

Analysis: Section 229 was held to incorporate the insolvency rules relating to secured and unsecured creditors, provable debts, and valuation of annuities and contingent liabilities, but not the general rule of priority of debts. Section 230 was treated as the specific provision governing priorities in winding up, and the ordinary rule of interpretation was applied that a special provision prevails over a general one. On that construction, all questions of priority in winding up were to be governed solely by section 230, and the assets of the company were otherwise distributable pari passu. The debt in question was a trade debt and did not fall within the specific priorities recognised by section 230.

Conclusion: The claim to general Crown priority in company liquidation was rejected, and priority was confined to the debts specifically enumerated in section 230.

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