Sunil Kumar Jain vs Sundaresh Bhatt

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2022 Supreme(SC) 348

M. R. SHAH, ANIRUDDHA BOSE
Sunil Kumar Jain – Appellant
Versus
Sundaresh Bhatt – Respondent

Advocates appeared:
For the Appellant(s) : Ms. Shobha Ramamoorthy, AOR Shilp Vinod, Adv. Mr. Nawaz Sherif Adv. Mr. M.A. Karthik, Adv. Mr. Vincy George, Adv. Mr. Gokulakrisnan, Adv. Ms. Ritika Rao, Adv.
For the Respondent(s): Mr. Alok Tripathi, AOR Mr. Parminder Singh Bhullar, AOR Mr. Rajeev Kumar Gupta, Adv. Mr. Dinesh Tripathi, Adv. Mr. Sanjay Kumar, Adv. Mr. Sanjay Kumar Tyagi, AOR M/s. Cyril Amarchand Mangaldas, AOR

Judgement Key Points

Certainly. The statement that if the EPFO claim is crystallized, it is protected by law and cannot be excluded from the liquidation process under Section 36, as the funds are specifically kept outside the liquidation estate assets, is supported by the following references:

The provision of Section 36(4) which explicitly states that sums due to workmen or employees from provident funds, pension funds, and gratuity funds are to be kept outside the liquidation estate assets and are not to be used for recovery in the liquidation process (!) .
The legislative history and the provisions of the IB Code that reinforce the exclusion of these funds from the liquidation estate, ensuring that crystallized claims from EPFO are protected and cannot be disregarded under Section 36 (!) (!) (!) .

These references collectively support the principle that such claims are protected and cannot be excluded from the liquidation process once crystallized.

JUDGMENT :

M.R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned order dated 31.05.2019 passed by the National Company Law Appellate Tribunal, New Delhi (hereinafter referred to as the ‘Appellate Tribunal’) in Company Appeal (AT) (Insolvency) No. 605 of 2019, by which the Appellate Tribunal has dismissed the said appeal preferred by the appellants herein – workmen/employees of M/s ABG Shipyard Limited (hereinafter referred to as the ‘Corporate Debtor’), working at Dahej and Mumbai, which was filed against the order passed by the National Company Law Tribunal, Ahmedabad Bench, Ahmedabad (hereinafter referred to as the ‘Adjudicating Authority’) dated 25.04.2019 not granting any relief to them with regard to their claim relating to salary, which they claimed for the period involving ‘Corporate Insolvency Resolution Process’ (hereinafter referred to as the ‘CIRP’) and the prior period, original applicants – workers/employees have preferred the present appeal.

2. That the Corporate Debtor was a private sector Ship Building Yard with its manufacturing activities at Dahej Yard and Surat Yard in Gujarat and having its corporate office at Mumbai. That prior to the initiation of

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2022 Supreme(SC) 348

M. R. SHAH, ANIRUDDHA BOSESunil Kumar Jain – AppellantVersusSundaresh Bhatt – Respondent

M. R. SHAH, ANIRUDDHA BOSE
Sunil Kumar Jain – Appellant
Versus
Sundaresh Bhatt – Respondent