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2025 Supreme(Online)(NCLT) 3022
NATIONAL COMPANY LAW TRIBUNAL
Regional Provident Fund Commissioner – Appellant
Versus
C.A Mahalingam Suresh Kumar – Respondent
IA(I.B.C) - 57/2024
For the Petitioner:Sajeev kumar
For the Respondent:AG SATHYANARAYANA
Employee provident fund dues are excluded from the liquidation estate and must be prioritized, with claims submitted post-liquidation onset deemed inadmissible.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 60(5) - Employees Provident Funds and Miscellaneous Provisions Act, 1952 - Liquidator's obligations during CIRP - Corporate Debtor's liquidation ordered - EPFO claims for PF dues and penalties - Claims must be submitted timely per statutory regulations. (Paras 6 to 24)
(B) Legal principle - Employee provident fund dues are excluded from the liquidation estate and must be prioritized over other debts as per established legal precedents. (Paras 19, 22)
(C)
Facts of the case:
Application filed by the Regional Provident Fund Commissioner to modify the stakeholder list and prioritize PF claims after liquidation commencement. Initial claim admitted but revised claims were rejected as time-barred. (Paras 1.1, 2.1, 2.15)
Findings of Court:
The tribunal held that EPFO’s claims cannot be modified without prior approval, and any claims submitted after the liquidation commencement were not admissible. The tribunal also noted that damages and penalties under the EPF Act are secondary and treated as unsecured debts. (Paras 23, 24)
Issues: Whether EPFO’s additional claims submitted after the revised deadline should be considered, and whether the Liquidator had the authority to modify the stakeholders' list.
Ratio Decidendi: Moratorium under IBC prohibits claims based on assessments made after liquidation commencement, and funds due to EPF are considered separate from other corporate debts. (Paras 20 to 22)
Result: Application dismissed.
| Table of Content |
|---|
| 1. initial facts in cirp initiation and claims. (Para 2) |
| 2. respondent's submission on epfo's locus standi. (Para 3) |
| 3. conclusion endorsing dismissal of the application. (Para 5 , 6) |
O R D E R
Per Coram:
1. The present application has been filed by the Regional Provident Fund Commissioner on 25.01.2024, u/s 60(5) of the Insolvency and (‘applicant’/‘Employee Provident Fund Bankruptcy Code, 2016 (’The Code’), r/w Rule 11 of the National Organisation’) Company Law Tribunal Rules, 2016 with the following prayers: -
i. To modify the list of stake holders filed by the Liquidator before this Hon’ble Tribunal and thereby incorporating the additional claims put forward by the applicant also and with further direction to the Liquidator to disburse the entire amount due to the applicant on priority;
ii. To declare that the amount due to the EPFO is an exempted item under Section 36 (4)(a) (iii) of the IBC from the Liquidation estate and hence the EPFO is entitled to get the entire amount claim before the Liquidator;
iii. Render such other orders which may be passed by this Hon’ble Tribunal as it is deemed fit and proper.
2. The facts as explained by the Counsel for the applicant and as narrated in the application are summarized hereunder: -
2.1 It is submitted that the Corporate Debtor is an establishment covered under the provisions of Employees Provident Funds and Miscellaneous Provisions Act, 1952.
2.2 Corporate Insolvency Resolution Process against the Corporate Debtor was initiated by NCLT, Chennai Bench vide its order dated 20.03.2019 in IBA/240/2019 and PCS Mr. S. Rajendranwas appointed as the Interim Resolution Professional.
2.3 The IRP made public announcement on 25.03.2019, calling upon all creditors of the Corporate Debtor to submit claims with proof on or before 03.04.2019. The public announcement was also hosted on the website of Insolvency and Bankruptcy Board of India (IBBI) and on the company’s website.
2.4 The IRP vide letter dated 01.04.2019 communicated his appointment to the applicant and in response, EPFO on 19.12.2019 forwarded a claim for Rs. 1,73,63,206/- (One crore seventy-three lakh sixty-three thousand two hundred six rupees only). This amount includes the assessment under Section 7A for the period from March, 2016 to February, 2019 for Rs.1,44,01,371/- and interest under Section 7Q for Rs.29,61,835/- for the period from December 2016 to May 2018.
2.5 Thereafter, this Tribunal, vide its order dated 16.12.2019 in MA/30/KOB/2019 and IA No.71/KOB/2019 in IBA 240/2019, ordered the liquidation of the Corporate Debtor. Subsequently, the respondent herein was appointed as the liquidator of the Corporate Debtor vide order dated 07.02.2020 in MA No.45/KOB/2019 in MA/30/KOB/2019 in IBA 240/2019.
2.6 Following his appointment, the Liquidator vide letter dated 15.02.2020, requested the Employees’ Provident Fund Organisation to submit the requisite claim form.
2.7 On 06.03.2020, claim amounting to Rs.1,73,63,206/- in Form G was forwarded to the liquidator.
2.8 Thereafter, during to the establishment on 15-12-2022 and on contacting the the Enforcement Officer’s inspection visit Liquidator for attesting the composite claim application of the members, it came to know that the establishment was functioning only upto the December of 2019. Since the last inspection had only covered dues up to February, 2019, a fresh inspection was assigned on 27-02-2023. As the establishment had closed and the Liquidator was acting on behalf of the employer, he was contacted via email to provide relevant records. The Liquidator submitted salary details for the period from March 2019 to December 2019, except for August and September 2019. Despite a follow-up email on 11-04- provided, leading the Enforcement Officer to use July 2019 2023, these two months’ records were not salary figures as the salary for the month of August and September 2019. The inspection report, along with a demand for Rs. 40,99,953/- covering outstanding dues from March to De
