The judgment establishes the principle that the Companies Act enacts its own scheme of priority under S.530, which prevails over conflicting rules of priority in other acts. It also emphasizes the importance of interpreting statutory provisions in a manner consistent with the specific statutory framework.

1. I think the Liquidator was right in rejecting the State Government's claim to priority for its debts otherwise than under S.530 (1) (a) of the Companies Act and that this appeal against that rejection, by application made under S.460 (6) of the Act read with R.164 of the Companies (Court) Rules, must likewise be rejected.

2. The claim is based on S.64 (1) (a) of the (Kerala) Insolvency Act (S. 61 (1) (a) of the Provincial Insolvency Act) which it is said is attracted by S.529 (1) of the Companies Act this company, it is not disputed, is an insolvent company. Some mention has also been made of the common law rule of priority for crown debts.

3. The Companies Act, by S.530, enacts its own scheme of priority. On its wording, this section is equally applicable to an insolvent as to a solvent company. Sub-section (5) of the section makes express and exclusive provision for an insolvent company and that scotches any attempt at the argument that S.530 being a general provision must yield, so far as insolvent companies are Concerned, to the special provision in S.64 of the Insolvency Act as attracted by S.529 of the Companies Act. Now, it will be noticed that, while S.64 (1) (a) of the Insolvency Act gives priority to all debts doe to Government, S.530 (1) (a) of the Companies Act gives priority only to revenues, taxes, cesses and rates due to Government and having become due and payable within the twelve months next before the relevant date. The remaining classes of debts specified in clauses (b) to (g) of S.530 (1) rank equally with the debts specified in clause (a) so that it follows, on the terms of the section, that other debts due to Government can come in only after the debts specified in clauses (b) to (g). S.511 of the Companies Act says that, subject to the provisions of the Act as to preferential payments, the assets of a company shall, on its winding up, be applied in satisfaction of its liabilities pari passu, and, although this section appears in Chapter III of Part VII of the Act dealing with a voluntary winding up, under the heading "Provisions applicable to every voluntary winding up" instead of, as it should in Chapter IT which is headed "Provisions applicable to every mode of winding up", it is well settled that the provision therein is vital to every mode of winding-up See S.425 (2) and G. G. in Council v. S. S. Mills AIR. 1946 F. C. 16. That being so it would appear that, subject to the provisions of the Companies Act as to preferential payments, there has to be a pari passu distribution of the assets of the company in satisfaction of its other liabilities. That at once rules out the application of the common law rule of crown priority see Food Controller v. Cork (1923) A. C. 647 and G. G. in Council v. S. S. Mills AIR. 1946 F. C. 16. It would rule out also the application of S.64 of the Insolvency Act unless it be that that is a provision of the Companies Act as to preferential payments, a provision incorporated by means of S.529. And then the question might well be asked why a statute which makes seemingly self-contained and comprehensive provision regarding priority should, with regard to some debts included within its scope as also debts not so included (though others belonging to the same class of creditors are), seek to attract the provisions of another statute. If special treatment were required for the excluded debts when due from an insolvent company, one would expect that to be accorded by the statute itself, namely the Companies Act, S.530. Moreover, as we shall presently see, the rules of priority in S.64(1) of the Insolvency Act are inconsistent with those in S.530 (1) of the Companies Act. The two cannot stand together and it should follow that it could never have been the intention of the Companies Act that the inconsistent rules in S.64 of the Insolvency Act should be applied.

4. As we have already seen, while S.64 (1) (a) of the Insolvency Act gives priority to all debts due to Governm