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5. Learned senior counsel contended that as per the provision contained in Section 20(4) of the SICA, until winding up proceedings are passed by the High Court, only BIFR is competent to sell the assets of the sick industrial company and if sale is conducted, the sale proceeds can be distributed to the lenders and others in accordance with the provision of Section 529-A and other provisions of the Companies Act, 1956 only after obtaining the orders of the High Court. The provisions of SICA shall prevail over any other provision on the same subject. He, therefore, contended that the action of the Employees Provident Fund Organization(EPFO) in conducting sale of the property of the petitioner company, which was already declared as sick industrial company by referring to section 11 of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter referred to as Act, 1952) is ex facie illegal.

24. EPFO is a statutory authority vested with powers to enforce provisions of Act, 1952 including mode of recovery of dues from erring employer. The EPFO exercised such powers to recover dues from petitioner-company. While doing so, it cannot be said that it was not acting bonafidely and that it was appraised that in view of provision in Section 20(4) of BIFR, it is not competent to sell the properties of petitioner company.

25. SICA is a special enactment dealing with sick industries. Section 20(4) of SICA is a special provision dealing with a situation where BIFR recommended sick industry for winding up, but yet to be wound up. It is but natural that the sick industry would be in default to clear its debts and liabilities. Properties of a sick industry can be sold only by BIFR. This provision is intended to protect the interest of all the lenders to the sick company. The Act, 1952 is also a special enactment dealing with Provident Funds of employees and it is a social welfare legislation. The welfare of the employees of the company is paramount. The EPFO is vested with wide amplitude of powers to enforce contributions from employer and to recover the dues payable by the employer. Section 11 of the Act, 1952 read with Section 530(1) of Companies Act, assign first priority to the amounts due under Act, 1952 from a company which is ordered to be wound up. The Act 1952 and SICA have overriding effect to the respective provisions. It is necessary to reconcile both the provisions. On harmonious reading of Section 20(4) of SICA, Section 11 of the Act, 1952 read with Section 530(1) of Companies Act, it is but imperative to assume that Section 11 of Act, 1952 read with Section 530(1) of Companies Act assign first charge to the dues to EPF but those provisions operate only after the company is wound up. These provisions also do not vest power in EPFO to recover the dues from the assets of a sick company directly. On the contrary. provision in Section 20(4) of SICA is explicit. BIFR alone is competent to sell the properties of a sick company pending winding up proceedings. Thus, EPFO ought to have approached BIFR to recover PF dues from the sick company. Such recovery can be only through the medium of BIFR. In the instant case, procedure envisaged in Section 20(4) of SICA was not followed.

30. The EPF Act, 1952 is a social welfare legislation and is intended to safeguard the interest of employees. Provident fund contribution is one of the important element in an employees service and savings accrued through such contributions alone are the backbone for the employee after his retirement. These contributions are part of his salary and emoluments and as a reward to the service rendered by him to the company while he was working. Therefore, the employees are entitled to receive their amounts. It is the paramount duty of employer to promptly credit the PF contributions. Failure to credit the same by employer is a serious matter. Ample powers are vested in the EPFO to enforce the discipline in the employer and to recover the amounts due. Section 11 of Act, 1952, imposes first charge on the assets of the sick industrial company. Section 530(1) of the Companies Act is also to the same effect. Thus even after winding up proceedings are concluded, the dues payable to the EPF are to be cleared first before clearing any other debts. The delay in payment of the amounts due to the employees, more particularly when the company became sick, would be detrimental to the welfare of the employees. As it appears, the company is not working and proposal to wind up the company was made on 21.06.2000. For the last more than 13 years, the employees of the petitioner company are denied of their due amounts. Therefore any further delay in settlement of their dues would cause great hardship and suffering. Furthermore, in the sale conducted by EPFO, a third party paid huge sum as per auction conducted and purchased the property. He is no way concerned with the controversy. He is a bonafide purchaser. If the sale is upset, his interests would also adversely affect.

31. It can not be said that the infraction pointed out is not curable. Thus, in the facts of this case, though it is noticed that the procedure as mandated by Section 20(4) of the SICA is not followed, the sale confirmed in the year 2011 cannot be upset at this stage.

32. Having regard to peculiar facts of this case, while rejecting the prayer of the petitioner, the EPFO is directed to approach BIFR duly intimating the sale of petitioner company assets, seek its ratification for appropriation of the sale proceeds towards PF dues of petitioner company and on receipt of such request, BIFR shall undertake required formalities to ratify the action of EPFO. Entire exercise shall be completed within a period of six (06) weeks from the date of receipt of copy of this order.