Statutory reference on repeal and re-enactment preserved provident fund priority, but unsupported legal charges were excluded.

On repeal and re-enactment of a consolidating statute, a reference to a repealed provision is construed as a reference to the corresponding re-enacted provision unless a contrary intention appears; accordingly, the priority under the Employees' Provident Funds Act continued by reference to the matching provision in the Companies Act, 1956. Provident fund contributions, statutory damages and administrative charges were treated as preferential debts recoverable in winding up, because they were supported by the Act and Scheme. Legal charges, however, were not shown to be recoverable under any governing provision and were excluded from priority.

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Issues: (i) Whether the reference in section 11 of the Employees' Provident Funds Act, 1952 to section 230 of the Indian Companies Act, 1913 must be construed, after repeal and re-enactment, as a reference to section 530 of the Companies Act, 1956 for purposes of preferential payment in winding up. (ii) Whether the appellant's claim for provident fund contribution, damages, administrative charges, penal damages, and legal charges falls within the category of debts entitled to priority under section 11 of the Employees' Provident Funds Act, 1952.

Issue (i): Whether the reference in section 11 of the Employees' Provident Funds Act, 1952 to section 230 of the Indian Companies Act, 1913 must be construed, after repeal and re-enactment, as a reference to section 530 of the Companies Act, 1956 for purposes of preferential payment in winding up.

Analysis: Section 8(1) of the General Clauses Act requires a reference in another enactment to a repealed provision to be read as a reference to the re-enacted provision, unless a different intention appears. The Companies Act, 1956 consolidated and amended the law relating to companies and substantially re-enacted section 230 of the 1913 Act in section 530. No intention to withdraw the priority given by section 11 of the Provident Funds Act was found in the later Companies Act. The re-enactment was treated as continuing the same priority scheme, with the reference adapted to the new provision.

Conclusion: The reference in section 11 of the Employees' Provident Funds Act, 1952 to section 230 of the Indian Companies Act, 1913 must be read as a reference to section 530 of the Companies Act, 1956.

Issue (ii): Whether the appellant's claim for provident fund contribution, damages, administrative charges, penal damages, and legal charges falls within the category of debts entitled to priority under section 11 of the Employees' Provident Funds Act, 1952.

Analysis: Provident fund contribution is expressly covered by section 11. Damages recoverable under section 14B include the item described as penal interest. Administrative charges are recoverable under paragraphs 38 and 39 of the Employees' Provident Funds Scheme and their default-related damages also fall within section 14B. The legal charges were not shown to be recoverable under any provision of the Act or the Scheme, and no legal basis for their priority was established.

Conclusion: The claim was entitled to priority except for the legal charges of Rs. 102.50, which were not proved to be recoverable as a preferential debt.

Final Conclusion: The appeal succeeded only to the extent that the provident fund-related amounts, other than the unsupported legal charges, were directed to be paid in priority in the winding up.

Ratio Decidendi: On repeal and re-enactment of a consolidating statute, a statutory reference to the repealed provision is construed as a reference to the corresponding re-enacted provision unless a contrary intention appears; consequently, provident fund liabilities falling within the governing scheme retain their preferential status, except for items not shown to be legally recoverable.

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