The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 prevails over the Employees Provident Fund and Miscellaneous Provisions Act, 1952, allowing secured creditors priority over provident fund dues.

Milind N. Jadhav, J.

1. Heard Mr. Rattesar, learned Advocate for Petitioner, Mr. Samanataray, learned Advocate for Respondent No. 1 and Mr. Mishra, learned Advocate for Respondent No.6.

2. Present Petition is filed seeking auction of Respondent No.2’s property / premises as per valuation done by Petitioner under the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (for short “the EPF Act”) and to restrain Respondent Nos.1 to 6 from taking possession of Flat Nos. 404, 405, 406, 1804, 1805 and 1806 situated in Shree Swami Samarth Prasanna, Unit No.1 Co-operative Housing Society Limited, Samartha Angan Complex, Oshiwara East, Mumbai 400053 (for short “said flats”).

3. Briefly stated, Petitioner is a statutory body constituted under the EPF Act, 1952 to administer Provident Fund to employees whose employers are enrolled / registered under the EPF Act,1952 and Respondent No.2 - Company is one such employer enrolled under the provisions of the EPF Act,1952. Respondent No. 2 – Company obtained loan / credit facitlites from Respondent No.1 – Bank for the purpose of running business operations but however defaulted in repayment of its dues. Respondent No.2 – Company also defaulted in remittances of provident fund dues of Rs.14,00,63,857/- between April 2017 and March 2021 to its employees despite deducting the same from their salaries.

3.1. In light of such failure, several employees registered numerous complaints with Petitioner – Board against Respondent No.2 – Company pursuant to which quasi-judicial proceedings for recovery of provident fund dues were initiated under Section 7A of EPF Act, 1952 before Regional Provident Fund Commissioner – I who passed Order dated 25.04.2022 directing Respondent No.2 – Company to pay Rs.14,00,63,857/- towards Provident Fund dues to employees along with costs.

3.2. Respondent No.2 filed Company Petition (IB) No. 285 (MB) 2022 under Section 10 of Insolvency and Bankruptcy Code, 2016 in the National Company Law Tribunal (for short “NCLT”) seeking initiation of Corporate Insolvency Resolution Process pursuant to which Petitioner – Board filed Intervenor Application therein seeking payment of Provident Fund dues. However, Respondent No.2 – Company filed Interim Application No. 656 of 2023 seeking withdrawal of Company Petition which was subsequently allowed by Order dated 22.02.2023 and Company Petition (IB) No. 285 (MB) of 2022 was disposed of as withdrawn.

3.3. On 13.07.2022, Petitioner issued Order of Attachment of Respondent No.2 – Company’s Bank Account under Section 8F of the EPF Act, 1952 pursuant to which Respondent No.1 – Bank addressed letter dated 25.07.2022 to Petitioner stating that Respondent No.2 held cash credit facility, bank guarantees and Guaranteed Emergency Credit Line with Respondent No.1 – Bank as well as Term Deposit of Rs.17,24,513.93/- which was secured to the aforementioned bank guarantees and credit facilities and can only be paid to Petitioner after dues of Respondent No.2 – Company held with Respondent No.1 – Bank are satisfied. Petitioner addressed letter dated 27.07.2022 stating that under Section 11 of the EPF Act, 1952 Provident Fund dues are statutory dues and hence take priority over all other dues to other creditors of Respondent No.2 – Comp