TEXTILE LABOUR ASSOCN. vs OFFICIAL LIQUIDATOR

The Supreme Court addressed the priority of payment to creditors in the context of a company under liquidation, specifically under Sections 529 and 529-A of the Companies Act, 1956. The Court held that the dues of ONGC Ltd. must be settled first from the assets of Ambica Mills Ltd. before any payments can be made to other creditors, including the workmen. The Court emphasized that the Official Liquidator must follow this priority in disbursing sale proceeds from the company's assets, thereby upholding the rights of the workmen to their outstanding dues.