Timely submission of claims in liquidation proceedings is essential; failure to file within the prescribed period results in forfeiture of rights to recover dues.

JUDGMENT :

Deepak Roshan, J.

Heard learned counsel for the parties.

2. This intra court appeal has been preferred by the appellant for setting aside the Interlocutory order dated 26th April, 2013 passed in I.A. No. 3050 of 2012 filed in CP Case No. 12 of 1998(P) by the learned Single Judge, whereby the interlocutory application was rejected with a direction to the Union of India to deposit the amount of Rs. 2,47,471/- towards the dues of Provident Fund of the employees and thereafter recover the said amount from the salary and/or pension of the Regional Provident Fund Commissioner or such other officers after holding enquiry.

3. The brief fact of the case is that M/s Refractory Specialties (IND) Ltd. Jamtara, Dumka was ordered to be wound up by the Patna High Court vide order dated 22.11.1999. Subsequently, though the Official Liquidator (hereinafter to be referred as OL) invited claims in July, 2007 till August, 2007 but the appellant missed the deadline. The appellant then approached the Company Court under Rule 177 of Company Court Rules, 1959 and filed I.A. No. 3050/12 in Company Petition No. 12/1998(P). The learned Company Judge instead of giving any direction to the OL to recover amount already paid to the secured creditor and repay the same to the Provident Fund (hereinafter as PF) authorities, rejected the I.A. with further direction to recover the dues from the salary of the concerned Regional PF Commissioner.

4. Mr. Rupesh Singh, learned counsel for the appellant submits that PF dues are in the nature of workmen’s dues defined under Section 529(3)(b) of Companies Act and by virtue of Section 11(2) of the Employees Provident Fund & Miscellaneous Provisions Act, 1952 (hereinafter to be referred as EPF & MP Act), it is a statutory first charge on assets of the establishment.

He further submits that a Division Bench of Orissa High Court in Employees Provident Fund Organisation v. Official Liquidator , C.O.A. No. 2 of 2011 relied on the decision rendered by the Hon’ble Apex Court in the matter of Employees Provident Fund Commissioner v. Official Liquidator of Esskay Pharmaceuticals Ltd. , (2011) 10 SCC 727 and held that the OL can recover amount already paid to the secured creditors and repay the same to PF authority with simple interest.

He contended that the learned Single Judge ought to have taken into consideration that EPF & MP Act, 1952 does not prescribe any period of limitation on the assessment of penal damages on account of delay in remittance.

5. Learned counsel for the respondents submits that after the confirmation for liquidation by this Court vide order dated 28.06.2006, the claims were invited by issuing notice in newspapers on 19.07.2007 giving time till 28.08.2007. However, other claimants except EPFO who had not submitted their claims within stipulated time had sought for condonation of delay from this Court and filed their claims later which were also either admitted/adjudicated/settled or rejected. The OL filed report dated 07.09.2010 for declaration of “Dividend” and on the said report, this Court by order dated 16.12.2010 permitted the OL to declare “Dividend”. The payment has been done by 28.12.2010.

It has been further submitted that the claim of the PF department was filed after an unexplained delay of 4 years. The allegations of lapses on part of OL are frivolous and lapses are on the part of EPF department. Thus, the claim of the appellant at a belated stage cannot be considered by the OL without the permission of Company Court. Prior Application also cannot be taken into consideration by OL because the dates are being fixed by the Court under the provisions of law and Rules made in Companies Act.

It has been lastly submitted that the order passed by the Company Court is just and proper because the EPF department approached to the OL and the Court beyond the period fixed by this Court and virtually thereafter almost all amount has been spent/disbursed to the secured creditors by the order of the Company