EMPLOYEES PROVIDENT FUND COMMISSIONER versus O.L. OF ESSKAY PHARMACEUTICALS LIMITED

Citation: [2011] 15 S.C.R. 336 · Decided: 08-11-2011 · Supreme Court of India · Bench: G.S. SINGHVI · Disposal: Appeal(s) allowed
Cited by 2 judgment(s) · see the full citation network in Lexace
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

A 
B 
c 
(2011] 15 (ADDL.) S.C.R. 336 
EMPLOYEES PROVIDENT FUND COMMISSIONER 
v. 
O.L. OF ESSKAY PHARMACEUTICALS LIMITED 
(Civil Appeal No. 9630 OF 2011) 
NOVEMBER 8, 2011 
[G. S. SINGHVI AND H. L. DATTU, JJ.] 
Employees' Provident Funds and Miscellaneous 
Provisions Act, 1952: 
Object of its enactment - Discussed. 
s.11(2) - Priority of payment of contributions over other 
debts - Non-obstante clauses contained in s. 11 (2) of the EPF 
Act and s.529A of the Companies Act - Interpretation of the 
D provisions - Held: By virtue of non-obstante clause contained 
in s. 11 (2) of the EPF Act, any amount due from an employer 
is deemed to be first charge on the assets of the 
establishment and is payable in priority to all other debts 
including the debts due to a bank, which falls in the category 
E of the secured creditors - It cannot be said that the non-
obstante clause contained in subsequent legislation i.e. 
s.529A(1) of the Companies Act prevails over the similar 
clause contained in s. 11 (2) of the EPF Act - While inserting 
s.529A in the Companies Act, Parliament, in its wisdom, did 
F 
not declare the workmen's dues (which inC!udes various dues 
including provident fund) as first charge - The effect of the 
amendment is only to expand the scope of the dues of 
workmen and place them at par with the debts due to secured 
creditors and there is no reason to interpret this amendment 
G as giving priority to the debts due to secured creditor over the 
dues of provident fund payable by an employer - Of course, 
after the amount due from an employer unde1 the EPF Act is 
paid, the other dues of the workers will be treated at par with 
the debts due to secured creditors and payment thereof will 
H 
336 
EMPLOYEES PROVIDENT FUND COMMNR. v. O.L. OF 337 
ESSKAY PHARMACEUTICALS LTD. 
be regulated by the provisions contained in s.529(1) read with 
A 
s.529(3), 529A and 530 of the Companies Act - Companies 
Act, 1956 - s. 529A. 
Companies Act, 1956: 
ss.529, 530 (as amended) and s.529A - Interpretation of 8 
- Held: By Companies (Amendment) Act, 1985, proviso was 
q_dded to s.529(1) - By the same amendment, ss.529(3) and 
529A were inserted - Simultaneously, the expression "subject 
to the provisions of s.529A" was inserted in s.530(1) - The 
object of the amendments was to ensure that the legitimate C 
dues of workers should rank pari passu with those of secured 
creditors - What Parliament has done by these amendments 
is to define the term "workmen's dues" and to place them at 
par with debts due to secured creditors to the extent such debts 
rank under clause (c) of the proviso to s.529(1) - However, 
D 
these amendments, though subsequent in point of time, 
cannot be interpreted in a manner which would result in 
diluting the mandate of s. 11 of the EPF Act - Interpretation 
of statutes - Employees' Provident Funds and Miscellaneous 
Provisions Act, 1952. 
E 
s.529(1), proviso - Object of- Discussed. 
Interpretation of statutes: 
Contextual interpretation - Held: It is a well recognized 
F 
rule of interpretatior. that every part of the statute must be 
interpreted keeping in view the context in which it appears and 
the purpose of legislation - Another rule of interpretation of 
statutes is that if two special enactments contain provisions 
which give overriding effect to the provisions contained G 
therein, then the Court is required to consider the purpose and 
the policy underlying the two Acts and the clear intendment 
conveyed by the lang1,1age of the relevant provisions. 
Social welfare legislation - Interpretation of - Held: A 
legislation made for the benefit of workers must receive a H 
338 
SUPREME COURT REPORTS [2011] 15 (ADDL.) S.C.R. 
A liberal and purposive interpretation keeping in view the 
Directive Principles of State Policy contained in Articles 38 
and 43 of the Constitution - Constitution of India, 1950 -
Employees' Provident Funds and Miscellaneous Provisions 
Act, 1952. 
B 
Non-obstante clause - lnterpretarion of. 
Words and phrases: 
Expression 'workmen dues' - Meaning of, in the context 
c of s.529(3)(b) of the Companies Act, 1956. 
The question which arose for consideration in these 
appeals was whether priority given to the dues payable 
by an employer under Section 11 of the Employees' 
D Provident Funds and Miscellaneous Provisions Act, 1952 
(EPF Act) is subject to Section 529A of the Companies 
Act, 1956 in terms of which the workmen's dues and 
debts due to secured creditors are requir
Excerpt shown. Read the full judgment & AI analysis in Lexace.