- (1.) We have heard learned counsel for the parties. The question involved is singularly whether the dues towards provident fund under the provisions of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 (for short 'the 1952 Act') would get priority over debts. Reference has been placed by the appellant on decisions of this Court in Maharashtra State Cooperative Bank Limited v. APFC and Others AIR 2010 SC 868 : (2009) 10 SCC 123 : LNIND 2009 SC 1884 : (2009) 8 MLJ 758 : 2010-I-LLJ-644 and Maharashtra State Cooperative Bank Ltd. v. Kannad Sahakari Sakhar Karkhana Ltd. and Others (2014) 14 SCC 456 : LNINDORD 2013 SC 30066.
(2.) The appellant had questioned the provisions contained in Section 12-A(9) of the Andhra Pradesh Co-operative Societies Act, 1964 (for short 'the 1964 Act') as amended by virtue of Amendment made in the year 2003.
(3.) Section 12-A(9) of the 1964 Act is extracted hereunder: "The proceeds realised from the transfer of assets or assets and liabilities, in whole or in part, of the society concerned, shall be applied in discharge of the liabilities of such society in the following order of priority, namely: (i) all expenses incurred for preservation and protection of the assets; (ii)(a) dues payable to workmen and employees; (b) debts payable to secured creditors according to their rights and priorities inter se; (c) dues payable to provident fund or other authorities which are protected under a statute by a charge on the assets; (iii) debts payable to ordinary creditors; (iv) share capital contributed by the members of the society: Provided further that the debts specified in each of the categories shall rank equally and be paid in full, but in the event of the amount being insufficient to meet such debts, they shall abate in equal proportions and be paid accordingly: Provided also that the question of discharging and liability with regard to a debt specified in a lower category shall arise only if a surplus fund is left after meeting all the liabilities specified in the immediately higher category.";