2015 (11) TMI 1905 - HC - Indian Laws

Workers must approach Commissioner directly for provident fund claims, not Official Liquidator during company liquidation

Delhi HC dismissed an application seeking directions to Official Liquidator to apply for release of provident fund dues for workers of a company in ... Seeking withdrawal of application - Prayer for directions to the Official Liquidator to apply to the concerned Commissioner, Provident Fund, for releasing provident fund dues of the applicants who claim to be the workers of the company in liquidation - HELD THAT:- As is well known, under the EPF Act, a special statutory relationship has been posited between the workmen and the Commissioner, Provident Fund, on the one hand and the company and the Commissioner, Provident Fund, on the other; and there is nothing to suggest that the Commissioner, Provident Fund, has been absolved of his duty in maintaining all relevant records of workmen’s dues towards provident fund; whilst also ensuring that all such dues entrusted to him by the company are duly disbursed in accordance with law. There is nothing to presume that this Court can absolve the Commissioner, Provident Fund, of his statutory duties in this regard and place them on a third party such as the Official Liquidator. The invitation of claims by the Liquidator of a company can only be limited to such claims that can legitimately be made by the claimant against that company. If the claim for provident fund could not lie against the company in the first place, then there can hardly be any ground for the same to be legitimately paid by the Official Liquidator. Of course, it goes without saying that under the relevant statute, it would always be open to the applicants to move appropriate claims before the Commissioner, Provident Fund, who would thereafter be obliged to compute the same; and further, in case the Commissioner, Provident Fund, concludes that there are some dues payable to him by the company in this behalf, it would be for him to move an appropriate claim before the Official Liquidator in his capacity as a trustee of provident fund dues. The application is dismissed as withdrawn. Issues:1. Interpretation of the Companies (Court) Rules, 1959 regarding the release of provident fund dues for employees of a company in liquidation.2. Obligations of the Official Liquidator in administering the affairs of a company in liquidation.3. Legal basis for the claims of workmen seeking provident fund dues from the Official Liquidator.4. Relationship between workmen, the Commissioner of Provident Fund, and the company in liquidation under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952.5. Examination of claims by the Official Liquidator and the role of the Commissioner of Provident Fund in disbursing dues.6. Applicability of judgments from other High Courts in determining the rights of workmen in a liquidation process.Analysis:1. The judgment interprets Rule 9 of the Companies (Court) Rules, 1959 concerning the release of provident fund dues for employees of a company in liquidation. The nature of the direction sought by the applicants does not have a sound legal basis as the company, although under administration, remains in existence with its obligations intact under the control of the Official Liquidator. The Liquidator is mandated to determine all dues payable to and by the company, including claims by workmen for payment of dues.2. The obligations of the Official Liquidator in administering the affairs of a company in liquidation are clarified. The Liquidator steps into the shoes of the management and is responsible for managing the company's assets transparently. However, the obligations of the company, workmen, and the Commissioner of Provident Fund remain unchanged despite the company being under administration.3. The judgment questions the legal basis for workmen seeking provident fund dues from the Official Liquidator. It emphasizes that such claims should be directed to the Commissioner of Provident Fund as per the statutory obligations outlined in the Employees' Provident Funds and Miscellaneous Provisions Act, 1952.4. The relationship between workmen, the Commissioner of Provident Fund, and the company in liquidation under the EPF Act is highlighted. The statute imposes obligations on the company to forward provident fund payments to the Commissioner, who is responsible for disbursing the dues to workmen. This statutory relationship remains intact irrespective of the company being under administration.5. The judgment discusses the examination of claims by the Official Liquidator and the role of the Commissioner of Provident Fund in disbursing dues. It clarifies that claims for provident fund dues should be directed to the Commissioner, and any claims made directly to the Official Liquidator would be rejected since the company was not obligated to pay such amounts.6. The applicability of judgments from other High Courts in determining the rights of workmen in a liquidation process is addressed. The judgment emphasizes that while judgments from other High Courts may have persuasive value, they are not binding. The court declines to grant relief based solely on judgments from other jurisdictions without a proper legal basis in the present case.