Claims against a corporate debtor in liquidation, particularly assessments under the EPF & MP Act made after the liquidation commencement date, are inadmissible as they fail to satisfy the requirement of Regulation 16(2) of the IBBI (Liquidation Process) Regulations, 2016, which mandates that debts must exist on the commencement date.

__________________________________________________________________________

ORDER

I.A. 2670/2024 [Sec. 60(5)]

1. Heard Ld. Counsel for the Applicant and Ld. Liquidator. Perused the record.

2. The present Application has been filed by Central Board of Trustees, EPF (‘Applicant’) under section 60(5) of the Insolvency and Bankruptcy Code, 2016 (‘the Code’) seeking following reliefs: -

a. To pass an order and direct the liquidator to admit and pay the claim of Rs. 8,09,617/- towards provident fund dues under sections 7Q, 14B and Short Remittance of EPF & MP Act, 1952.

b. Any other order that this Hon’ble Tribunal may deem fit in the facts and circumstances of this case.

Relevant facts to be noticed

3. Upon an application filed by an Operational Creditor under Section 9 of the Code, the Corporate Insolvency Resolution Process (in short ‘CIRP’) of M/s. Italtinto Equipment Private Limited (“hereinafter referred to as ‘Corporate Debtor’) commenced on 09.02.2021 and Mr. Bhaskar Gopal Shetty (Respondent) was appointed as the Interim Resolution Professional (in short ‘IRP’). Public announcement was made on 20.02.2021 inviting claim from stakeholders to be filed on or before 05.03.2021. Based on the claims, CoC was constituted. The respondent was confirmed by the CoC to be appointed as RP.

4. As no resolution plan was received, upon an application under Section 33(1) of the Code, this Tribunal ordered for liquidation of the Corporate Debtor on 08.06.2022 in IA/2200/2021 and the Respondent was appointed as the Liquidator.

5. The Applicant, being the Regional Provident Fund Commissioner – II (Legal), Regional Office Thane (North), received email dated 18.07.2022 from the Employees’ Provident Fund Organisation (in short ‘EPFO’) about the liquidation of the Corporate Debtor.

6. On 06.02.2023, the Applicant addressed an email to the Liquidator providing an e-notice for inquiry under section 7Q and 14B of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (in short ‘EPF & MP Act’). The Liquidator replied vide email dated 10.02.2023 and requested the Applicant to close the matter since the company had no assets and the filing of any claim would also be barred by limitation.

7. The Applicant filed its claim of Rs. 8,09,617 before the liquidator on 17.08.2023 and also sought to keep the Provident Fund (in short ‘PF’) and allied dues out of the Liquidation Estate.

8. The Applicant filed the present application on 08.05.2024 seeking admission of its claim and payment of the dues.

9. Submissions of the Applicant

9.1 It is submitted that the Applicant received the intimation vide email dated 18.07.2022 regarding liquidation of the Corporate Debtor and only after receipt of the said email the Appellant was in position to know that the Corporate Debtor is undergoing CIRP proceedings. Accordingly, verification was initiated with respect to position of short remittance, PF dues with regards to non-remittance of monthly PF contributions under Section 7A , interest and penalty i.e. damages under Section 7Q and 14B of the EPF & MP Act.

9.2 It is submitted that upon verification, it was identified that there is short remittance i.e. default in PF dues for amount of Rs. 7,50,081. Further, the Corporate Debtor also defaulted in remittance of PF contribution within the time prescribed under the EPF & MP Act read with EPF Scheme 1952. For the said belayed payment, the provisions of section 7Q (i.e. interest) and Section 14B (i.e. penalty in form of damages) of the EPF & MP Act were invoked and summons to the corporate debtor were issued for the period starting from 11/2016 to 11/2