The Supreme Court on Thursday (November 20) held that employees' provident fund dues take precedence over the 'priority' rights claimed by banks in the sale of a company's assets under the SARFAESI Act.

The Court held that dues under the Employees' Provident Funds and Miscellaneous Provisions Act enjoy priority over the claims of secured creditors proceeding under the SARFAESI Act, reaffirming that the statutory first charge created under the EPF law overrides the “priority” granted to secured creditors in Section 26E of the SARFAESI Act.

Holding that a statutory first charge is superior, the bench ruled that EPF dues must be discharged first from the auction proceeds of the secured assets. Only the remaining amount, if any, can be applied towards clearing the bank's debt. The Court perm

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