TaxTMI 
TaxTMI 
1936 (12) TMI 21
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....debts have priority in winding-up proceedings which are specifically mentioned in section 230 of the Companies Act. Section 229 provides that: "In the winding up of an insolvent Company the same rules shall prevail and observed with regard to the respective rights of secured and unsecured creditors and to debts provable and to the valuation of annuities and future and contingent liabilities, as are in force for the time being under the law of insolvency with respect to the estates of persons adjudged insolvent; and all persons who in any such case would be entitled to prove for and receive dividends out of the assets of the company may come in under the winding-up, and make such claims against the Company as they respectively are entitled....
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....e event of a landlord or other person distraining or having distrained on any goods or effects of the Company within three months next before the date of a winding up order, the debts to which priority is given by this section shall be a first charge on the goods or effects so distrained on, or the proceeds of the sale thereof: Provided that in respect of any money paid under any such charge the landlord or other person shall have the same rights of priority as the person to whom the payment is made." Section 49 of the Presidency Towns Insolvency Act provides inter alia that- "(1)In the distribution of the property of the insolvent there shall be paid in priority to all other debts- (a)all debts due to the Crown or to any local authority....
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.... of abrogating the general provision in section 49. The usual rule of interpretation of statute law is that where a section of an Act, which lays down a general rule, is incorporated into another Act which gives a particular rule on the same subject, the particular rule will abrogate the general rule: (Crates on Statute Law, 3rd Edition, page 199). Applying this principle I have no doubt that the intention of the legislature was to limit the priority of Crown debts in winding-up proceedings to those specifically mentioned in section 230, and that is the combined effect of the sections in question. Apart from the exceptions contained in section 230 the assets of a Company must be applied in satisfaction of its liabilities pari passu in acc....