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of <h1>Tribunal Upholds Resolution Plan in EPF Act Case, Emphasizes Corporate Debtor's Statutory Obligations</h1> <h3>Employees Provident Fund Organisation Through Regional Provident Fund Commissioner-II Versus Mr. Subodh Kumar Agarwal, Mr. Sujeet Kumar, M/s Ambient Computronics Pvt. Ltd.</h3> Employees Provident Fund Organisation Through Regional Provident Fund Commissioner-II Versus Mr. Subodh Kumar Agarwal, Mr. Sujeet Kumar, M/s Ambient ... Issues Involved:1. Compliance with Employees Provident Fund and Miscellaneous Provisions Act, 1952.2. Initiation and conduct of insolvency proceedings.3. Determination and inclusion of provident fund dues in the Resolution Plan.4. Obligations of the Resolution Professional and Interim Resolution Professional.5. Approval and validity of the Resolution Plan.6. Statutory obligations and liabilities of the Corporate Debtor.7. Regulatory gaps and recommendations for amendments.Detailed Analysis:1. Compliance with Employees Provident Fund and Miscellaneous Provisions Act, 1952:The Corporate Debtor, M/s Ambient Computronics Private Limited, was brought under the purview of the 1952 Act from 01.11.2017. The Corporate Debtor defaulted in compliance with the provisions of the 1952 Act from October 2011 to October 2020. An inquiry was initiated to determine the provident fund dues, and a final order dated 21.01.2022 computed the liability as Rs. 12,17,854/-.2. Initiation and conduct of insolvency proceedings:Insolvency proceedings were initiated against the Corporate Debtor by the Adjudicating Authority on 10.12.2020. The Resolution Plan was filed by Respondent No. 2, who was also a Director of the Suspended Board of Directors of the Corporate Debtor. The Committee of Creditors (CoC) approved the Resolution Plan, and the Adjudicating Authority approved it on 14.12.2021.3. Determination and inclusion of provident fund dues in the Resolution Plan:The Appellant issued a Show Cause Notice under Section 7A of the 1952 Act to the Corporate Debtor and informed the Resolution Professional about the proceedings. However, the Resolution Plan did not allocate any amount towards the provident fund dues. The Appellant argued that it was obligatory for the Resolution Professional to include the provident fund dues in the Resolution Plan.4. Obligations of the Resolution Professional and Interim Resolution Professional:The Resolution Professional contended that no claim was filed by the Appellant, and thus there was no occasion to include their claim in the Resolution Plan. The Resolution Professional cited Section 36(4)(a)(iii), arguing that the Corporate Debtor is not obliged to make any payment towards the provident fund, pension fund, and gratuity fund. However, the Tribunal rejected this argument, stating that the Corporate Debtor has a statutory obligation to contribute to these funds.5. Approval and validity of the Resolution Plan:The Tribunal noted that the Appellant did not submit their claim during the CIRP process, and thus the claim was not included in the list of creditors or the Information Memorandum. The Tribunal upheld the Resolution Plan, stating that the law does not require inclusion of claims not filed during the CIRP process.6. Statutory obligations and liabilities of the Corporate Debtor:The Tribunal emphasized that the Corporate Debtor has a statutory obligation to make payments towards the provident fund, pension fund, and gratuity fund. The Tribunal rejected the argument that the Corporate Debtor has no liability to make such payments and highlighted the need for these amounts to be kept out of the liquidation assets.7. Regulatory gaps and recommendations for amendments:The Tribunal identified gaps in the statutory scheme regarding the inclusion of ongoing statutory proceedings in the Information Memorandum. The Tribunal recommended that the regulation framing authority consider amendments to include ongoing statutory proceedings likely to saddle the Corporate Debtor with liabilities. The Tribunal suggested that the IRP/RP should be obliged to inform creditors whose liabilities are on the record of the Corporate Debtor.Conclusion:The Tribunal disposed of the appeal, granting the Appellant liberty to pursue appropriate remedies for recovery of the amount under Section 7A. The Tribunal also forwarded the order to the Insolvency and Bankruptcy Board of India and the Ministry of Corporate Affairs for consideration of the observations and potential regulatory action.
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