Statutory dues under the EPF Act are prioritized and protected under the IBC, independent of the liquidation proceedings.

NATIONAL COMPANY LAW TRIBUNAL INDORE BENCH AT INDORE

ITEM No.107

Proceedings under Section 60(5) r.w Rule 11

IN THE MATTER OF:

Regional Provident Fund Commissioner ........Applicant

V/s

Naveen Khandelwal, Liquidator of Brain Masters Classes Pvt Ltd ........Respondent

Coram:

Mohan P. Tiwari, Hon’ble Member(J) Sanjeev Sharma, Hon’ble Member(T)

PRESENT:

For the Applicant : Ms. Darshana Baghel, Adv

For the Respondent :

ORDER

Order delivered on 13/08/2025

IA/269(MP)2024

1. This is an application filed by the Applicant under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 ("IBC"), read with Sections 7A, 14B, and 7Q of the Employees Provident Fund & Miscellaneous Provisions Act, 1952 ("EPF Act") and Rule 11 of the National Company Law Tribunal Rules, 2016. The Applicant seeks admission of its claim arising from statutory proceedings initiated under the EPF Act for the defaulting period from

April 2015 to January 2018.

2. The claim comprises the following components:

Section 7A: ₹6,46,860/- (04/2015 to 01/2018)

Section 14B: ₹2,06,910/- (02/04/2023 to 30/10/2023) and ₹6,46,860/- (15/12/2016 to

29/02/2024)

Section 7Q: ₹1,31,126/- (02/04/2023 to 30/10/2023) and ₹5,21,193/- (15/12/2016 to

29/02/2024)

Total Claim: ₹21,52,949/- (Rupees Twenty-One Lakhs Fifty-Two Thousand

Nine Hundred Forty-Nine Only)

3. The Corporate Debtor was admitted into liquidation by order dated 04.05.2021, and a Liquidator was appointed. The Applicant submits that despite multiple communications dated 09.02.2022, 13.07.2022, and 12.03.2024, the Liquidator neither acknowledged nor adjudicated its claim.

Meanwhile, the Liquidator filed an application under Section 54 of the IBC for dissolution of the Corporate Debtor on 03.05.2022, which remains pending before this Tribunal.

4. The Respondent-Liquidator contends that the Applicant's claim is barred by limitation, having been filed beyond the 30 days claim submission period stipulated under Regulation 12 of the IBBI (Liquidation Process) Regulations, 2016 ("Liquidation Regulations"). It is further submitted that the claim was filed after the application for dissolution had already been moved and, therefore, is procedurally untenable. 5. We have heard the learned counsel for the respective parties at length.

6. The following questions arise for consideration:

(i) Whether the EPFO’s claim is admissible despite being filed after the statutory claim window and post the filing of the dissolution application?

(ii) Whether statutory dues under the EPF Act enjoy priority or special treatment under the IBC?

(iii) Whether the Liquidator was justified in not acting upon or adjudicating the EPFO’s claim?

Findings and Analysis

7. The IBC provides statutory protection to workmen’s dues, particularly wages, salaries, provident fund, gratuity, and pension. As per Section 36(4)(iii), amounts due from provident, pension, and gratuity funds are excluded from the liquidation estate and cannot be used for recovery. Section 5(13) of the IBC, 2016 defines insolvency resolution process cost. The insolvency resolution process costs that would include wages/salaries of employees who actually worked during the CIRP and must be paid in full under Section 53(1)(a). Section 53 (1) (b) (i) of the IBC, 2016 deals with the workmen’s dues for the period of twenty-four months preceding the liquidation commencement date. Section 53 (1) (c) provides for hierarchy of wages and unpaid dues owed to the employees other than workmen for the period of 24 months preceding the liquidation commencement date. The Liquidator must adjudicate such claims based on actual work and the debtor’s operational status. Regulation 12 of the Liquidation Regulations requires the liquidator to make public announcement calling upon stakeholders to submit their claims or update their claims submitted during the corporate insolvency resolution process, as on the liquidation commencement date and Regulation 12 (2) (b) provides a 30-day window from the liquidation commencement date (in this case, 08.05.202