2024 (1) TMI 91 - AT - Insolvency and Bankruptcy

Resolution applicant must pay provident fund dues of Rs 15.62 lakh but not interest and penalty due to delayed assessment

The NCLAT partly allowed an appeal regarding resolution plan approval, determining that provident fund statutory dues of Rs. 15,62,128/- assessed as of ... Approval of the resolution plan - whether the amount which has been assessed by the Appellant at a later date i.e. on 10.07.2019 and was not an assessed amount, being part of Form B as on 18.02.2019 has rightly been rejected by the RP and the Adjudicating Authority? HELD THAT:- In the present case, it is found that CIRP was initiated on 12.06.2018, public announcement was made on 15.06.2018, the time period provided of 90 days expired on 15.09.2018 but still keeping in view the fact that it is a matter qua the amount of EPF, Form B was as on 18.02.2019 was entertained but in so far as the amount of interest and penalty is concerned, there was an inordinate delay as it has been assessed on 10.07.2019. Before parting with this order, Counsel for the Appellant has drawn our attention to an observation made by the Adjudicating Authority in the first appeal in Para 15 of the impugned order where it has been said that “statutory dues of the CD are also settled at 10% of the admitted claims”. In this regard, it is submitted that in view of the judgment of this Tribunal rendered in the case of JET AIRCRAFT MAINTENANCE ENGINEERS WELFARE ASSOCIATION VERSUS SHRI ASHISH CHHAWCHHARIA RESOLUTION PROFESSIONAL FOR JET AIRWAYS (INDIA) LTD., COMMITTEE OF CREDITORS OF JET AIRWAYS (INDIA) LTD., HDFC BANK, M/S. VRIHIS PROPERTIES PRIVATE LIMITED [2022 (2) TMI 627 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI] the admitted claim has to be released. Counsel for the Respondent has submitted that there is no quarrel with the law laid down by this Court in this regard which has further been affirmed by the Hon’ble Supreme Court in appeal. The first appeal is partly allowed only to the extent that the amount of Rs. 15,62,128/-, being statutory dues of the provident fund shall be paid by the Resolution Applicant. The rest of the contention raised in this appeal are hereby rejected. Issues involved: The judgment involves two appeals challenging the validity of orders related to an application filed by the Regional PF Commissioner under the Insolvency and Bankruptcy Code, 2016. The issues revolve around the approval of a resolution plan and the consideration of a claim by the RP regarding EPF dues.First Issue - Approval of Resolution Plan:In the first appeal, the Appellant challenged the validity of an order allowing an application filed by the Resolution Professional (RP) seeking approval of the resolution plan. The Appellant contended that additional amounts assessed under Section 7 by the Assessment Officer should also be considered as part of EPF dues.The Adjudicating Authority rejected the application on the grounds that the disputed amount did not form part of the claim in Form B. The Appellant argued that the RP and the Adjudicating Authority erred in not allowing the full claim amount of Rs. 24,61,073/-.The Respondent's Counsel contested the Appellant's argument, stating that the disputed amount was not part of the original claim and was assessed later, beyond the timelines provided under the Code. They cited a similar case where a belated claim was rejected and upheld by the Appellate Tribunal and the Supreme Court.After considering the arguments, the Tribunal partly allowed the first appeal, directing the Resolution Applicant to pay the statutory dues of Rs. 15,62,128/- related to the provident fund.Second Issue - Consideration of EPF Dues:In the second appeal, the Appellant challenged the dismissal of an application seeking direction to the RP to consider a claim of Rs. 8,98,945/- in terms of an order passed by the Assessment Officer under the EPF Act, 1952. The Appellant argued that the disputed amount should be included as part of EPF dues.The Tribunal examined whether the amount assessed at a later date, beyond the original claim, should be considered as part of the EPF dues. The Appellant referenced a Supreme Court decision allowing the assessment of amounts for recovery as statutory dues.Ultimately, the Tribunal dismissed the second appeal, stating that the delayed assessment of interest and penalty did not align with the timelines prescribed under the Insolvency and Bankruptcy Code. The Tribunal upheld the RP's decision to reject the additional claim amount.This comprehensive summary highlights the key issues and details of the judgment, focusing on the challenges to the approval of the resolution plan and the consideration of EPF dues in the insolvency proceedings.