Provident fund dues remain enforceable in insolvency, and lawful recovery cannot be blocked by the corporate debtor's resolution process.

Statutory provident fund dues and recovery action under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 remain enforceable during corporate insolvency resolution, because the insolvency framework cannot be used to defeat liabilities required by applicable law. The Tribunal noted that such dues are not part of the corporate debtor's distributable assets and that any resolution plan must comply with Section 30(2)(e) of the Insolvency and Bankruptcy Code, 2016. It also indicated that the resolution professional must pursue the remedies available under the provident fund legislation rather than seek blanket protection from lawful recovery. Relief against the lien and recovery proceedings was rejected.

---

---

Issues: Whether the provident fund dues and consequential recovery action initiated by the Employees Provident Fund Organization could be enforced against the corporate debtor during the corporate insolvency resolution process, and whether the lien on the corporate debtor's bank account should be lifted.

Analysis: The demand was founded on proceedings under Sections 7A, 7Q and 14B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, and recovery was initiated through Section 8F. The Tribunal held that EPF dues are matters of statutory compliance, and that the resolution process cannot be used to defeat liabilities arising under the provident fund . It relied on the view that provident fund dues are not part of the corporate debtor's assets and that the resolution plan must conform to existing law under Section 30(2)(e) of the Insolvency and Bankruptcy Code, 2016. The Tribunal also noted that the Resolution Professional must follow the appellate remedies under the provident fund legislation rather than seek blanket relief against lawful recovery.

Conclusion: The request to lift the lien and to restrain the provident fund recovery proceedings was rejected, and the provident fund dues were held recoverable in accordance with the Employees' Provident Funds and Miscellaneous Provisions Act, 1952.

Ratio Decidendi: Statutory provident fund dues and their recovery cannot be defeated by the moratorium where the insolvency framework itself requires compliance with applicable law and excludes such dues from the corporate debtor's distributable assets.

---