Winding-up priority for ESI contributions is limited to the statutory look-back period; remaining debt ranks unsecured.

In winding up, an Employees' State Insurance Corporation contribution claim ranked in priority only to the extent expressly preserved by the later Companies Act, 1956. Section 530(1)(d) limited preferential treatment to contributions payable during the twelve months before the relevant date, taken as the appointment of the provisional liquidator; the General Clauses Act did not expand that priority. The Corporation therefore had priority only for the contribution within that period, while the balance ranked as an ordinary debt. The Court also held that, given the company's limited assets, the official liquidator need not have the accounts printed and sent to every creditor and contributory, and circulation of printed accounts was dispensed with.

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Issues: (i) Whether the Employees' State Insurance Corporation's claim for contribution was entitled to priority in liquidation, and if so to what extent; (ii) Whether the official liquidator was required to have the accounts printed and sent to every creditor and contributory.

Issue (i): Whether the Employees' State Insurance Corporation's claim for contribution was entitled to priority in liquidation, and if so to what extent.

Analysis: Section 94 of the Employees' State Insurance Act, 1948, gave priority to contributions under section 230 of the Indian Companies Act, 1913, but the liquidation was governed by the Companies Act, 1956. Under section 530(1)(d) of the Companies Act, 1956, only amounts due in respect of contributions payable during the twelve months next before the relevant date were preferential debts. The relevant date was the date of appointment of the provisional liquidator. The provisions of the General Clauses Act did not enlarge the Corporation's claim beyond the priority expressly preserved and modified by the later Companies Act.

Conclusion: The Corporation was entitled to priority only for the contribution payable during the twelve months preceding the appointment of the provisional liquidator, namely Rs. 87, and the balance ranked as an ordinary debt.

Issue (ii): Whether the official liquidator was required to have the accounts printed and sent to every creditor and contributory.

Analysis: Although section 462(3) and section 462(5) of the Companies Act, 1956 contemplated audit of the account and sending copies or a summary to creditors and contributories, the assets of the company were small and the Court considered that printing and posting copies was unnecessary in the circumstances.

Conclusion: Printing and sending copies of the accounts was dispensed with.

Final Conclusion: The preferential claim was confined to Rs. 87 as priority debt, the balance of the Corporation's claim remained unsecured, and the requirement to circulate printed accounts was waived.

Ratio Decidendi: Where a later winding-up statute expressly modifies an earlier priority scheme, only the preferential treatment expressly preserved by the later provision survives, and the remainder of the claim ranks with ordinary debts.

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