The Employees Provident Funds and Miscellaneous Provisions Act

11Priority of payment of contributions over other debts

¹[(1)] ²[Where any employer is adjudicated insolvent or, being a company, an order for winding up is made, the amount due--

(a) from the employer in relation to ³[an establishment] to which any ⁴[Scheme or the Insurance Scheme] applies in respect of any contribution payable to the Fund ⁵[or, as the case may be, the Insurance Fund], damages recoverable under section 14B, accumulations required to be transferred under sub-section (2) of section 15 or any charges payable by him under any other provision of this Act or of any provision of the ⁶[Scheme or the Insurance Scheme]; or

(b) from the employer in relation to an exempted ⁷[establishment] in respect of any contribution to ⁸[the Provident Fund or any Insurance Fund] (in so far it relates to exempted employees), under the the rules of ⁸[the Provident Fund or any Insurance Fund], ⁹[any contribution payable by him towards the Family Pension Fund under sub-section (6) of section 17], damages recoverable under section 14B or any charges payable by him to the appropriate Government under any provision of this Act or under any of the conditions specified under section 17,

shall, where the liability thereof has accrued before the order of adjudication or winding up is made, be deemed to be included among the debts which under section 49 of the Presidency-towns Insolvency Act, 1909 (3 of 1909), or under section 61 of the Provincial Insolvency Act, 1920 (5 of 1920), or under ¹⁰[section 530 of the Companies Act, 1956 (1 of 1956)], are to be paid in priority to all other debts in the distribution of the property of the insolvent or the assets of the company being wound up, as the case may be.

¹¹[Explanation.--In this sub-section and in section 17, "insurance fund" means any fund established by an employer under any scheme for providing benefits in the nature of life insurance to employees, whether linked to their deposits in provident fund or not, without payment by the employees of any separate contribution or premium in that behalf.

¹²[(2) Without prejudice to the provisions of sub-section (1), if any amount is due from an employer ¹³[whether in respect of the employees contribution (deducted from the wages of the employee) or the employer's contribution], the amount so due shall be deemed to be the first charge on the assets of the establishment, and shall, notwithstanding anything contained in any other law for the time being in force, be paid in priority to all other debts.]

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1. Section 11 re-numbered as sub-section (1) of that section by Act 40 of 1973, s. 3 (w.e.f. 1-11-1973).

2. Subs. by Act 37 of 1953, s. 9, for certain words.

3. Subs. by Act 94 of 1956, s. 3, for "a factory".

4. Subs. by Act 99 of 1976, s. 27, for "Scheme" (w.e.f. 1-8-1976).

5. Ins. by s. 27, ibid. (w.e.f. 1-8-1976).

6. Subs. by Act 99 of 1976, s. 27, for "Scheme" (w.e.f. 1-8-1976).

7 Subs. by Act 94 of 1956, s. 3, for "Factory".

8. Subs. by Act 99 of 1976, s. 27, for "the provident fund" (w.e.f. 1-8-1976).

9. Ins. by Act 16 of 1971, s. 23 (w.e.f. 23-4-1971).

10. Subs. by Act 40 of 1973, s. 3, for certain words (w.e.f. 1-11-1973).

11. Ins. by Act 99 of 1976, s. 27 (w.e.f. 1-8-1976).

12. Ins. by Act 40 of 1973, s. 3 (w.e.f. 1-11-1973).

13. Subs. by Act 33 of 1988, s. 16, for certain words (w.e.f. 1-8-1988).

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PRELIMINARY