The Companies (Amendment) Act, 1985
introduced Section 529A which states that certain dues are to be settle
in the case of winding up of a company even before the payments to
preferential creditors under Section 530. Section 529A states that in
the event of winding up of a company, workmen’s dues and debts due to
secured creditors, to the extent such debts rank under Section
529(1)(c), shall be paid in priority to all other debts. The debts
provable [Section 529(i)(a)] and the valuation of annuities and future
and contingent liabilities [Section 529(1)(b)] shall be paid in full,
unless the assets are insufficient to meet them, in which case they
shall abate in equal proportions. Workmen’s dues, in relation to a
company, means the aggregate of the following sums:
1. all wages or salary including wages payable for time or piece work and salary earned wholly or in part by way of commission of any workman, in respect of services rendered to the company and any compensation payable to any workman under any of the provisions of the Industrial Disputes Act, 1947;
2. all accrued holiday remuneration becoming payable to any workman, or in the case of his death to any other person in his right, on the termination of his employment before, or by the effect of, the winding up order or resolution;
3. all amounts due in respect of any compensation or liability for compensation under Workmen’s Compensation Act, 1923 in respect of death or disablement of any workman of the company;
4. all sum due to any workman from a provident fund, a pension fund, a gratuity fund or any other fund for the welfare of the workmen, maintained by the company.