The claims arising out of the matters specified in the Second Schedule shall have priorities in accordance with the following principles, namely:-
(a) Category I shall have precedence over all other categories and Category II shall have precedence over Category III, and so on;
(b) the claims specified in each of the categories, except Category IV, shall rank equally and be paid in full, but, if the amount is insufficient to meet such claims in full, they shall abate in equal proportions and be paid accordingly;
(c) the liabilities specified in Category IV shall be discharged, subject to the priorities specified in this section, in accordance with the terms of the secured loans and the priority, inter se, of such loans; and
(d) the question of discharging any liability with regard to a matter specified in a lower category shall arise only if a surplus is left after meeting all the liabilities specified in the immediately higher category.