The Nagpur bench of the Bombay High Court while setting aside a decision of the single judge stated that the PF dues are actually the dues of the workers and will have priority over the dues of the other secured and unsecured creditors in the liquidation of the company.
While deciding the matter on August 6, 2010, The single judge had taken a contrary view to the two decisions of the Supreme Court and had ruled that the PF dues were not the dues of the employees and therefore, would not have preference over the claims of other secured and unsecured creditors.
The company in question went into liquidation and the company petition itself was filed way back in 1990.The issue of PF dues paid to workers was decided in 2010 and the instant company appeal filed in 2011 was decided almost after a passage of nine years. While setting aside the impugned order, the High Court has now held that the PF dues shall have to be first satisfied by the respondent-Liquidator and thereafter the dues of other secured and unsecured creditors shall follow in accordance with law.
