EPF Dues Have First Charge Over Secured Creditors Under SARFAESI Act: Supreme Court

The article discusses a Supreme Court ruling which held that Employees’ Provident Fund (EPF) dues will have statutory first charge over secured creditors’ claims, even in proceedings under the SARFAESI Act. The Court clarified that employee welfare contributions are protected as a matter of social security and cannot be overridden by rights of banks or financial institutions enforcing security interests. This judgment strengthens the position of workers in insolvency and recovery proceedings, ensuring that their provident fund dues are prioritized before settlement of secured debts. The ruling has significant implications for lenders, insolvency professionals, and companies undergoing recovery or liquidation.