2024 (3) TMI 1291 - AT - Insolvency and Bankruptcy

Successful resolution applicant must pay Rs.75 lakh PF dues within two months under Section 7Q

Regional Provident Fund Commissioner, EPFO Regional Office Jamshedpur Versus Ms. Mamta Binani, Resolution Professional & Ors.

NCLAT Principal Bench affirmed the adjudicating authority's order regarding resolution plan approval involving PF and ESI dues. The tribunal directed the ... Approval of the Resolution Plan - Requirement of liability of PF and ESI dues to be paid in Full - Claim u/s 7A, 7Q, and 14B of the Employees' Provident Funds & Miscellaneous Provisions Act 1952 - Approval of Resolution Plan in which only amount proposed was amount u/s 7A - HELD THAT:- Similar issue decided in REGIONAL PROVIDENT FUND COMMISSIONER, VATWA, EMPLOYEES PROVIDENT FUND ORGANIZATION VERSUS SHRI MANISH KUMAR BHAGAT, (RESOLUTION PROFESSIONAL OF M/S. PERFECT BORING PVT. LTD.) , M/S. N.A. ROTA MACHINES & MOULDS INDIA [2023 (10) TMI 535 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI]. One of the claims which was not paid by the Resolution Plan in the said case was also claim under Section 14B of the Employees Provident Fund Miscellaneous Provisions Act, 1952. This Tribunal taking note of the claim under Section 14B took the view that the Central Board is empowered to waive the damages under Section 14B as per the scheme under the 1952 Act. It was observed that Section 14B referred to recommendation by Board under the 1952 Act. The said Act having been repealed and now repealed by the IBC Code, the power of recommendation can be exercised by NCLT. This Tribunal ultimate directions in paragraph 18(i) (c) permitted the SRA to make an application to Central Board for waiver of 100 per cent damages along with the copy of the order. In the facts of the present case, we are inclined to grant liberty to SRA to make an application to the Central Board for waiver of the amount of damages under Section 14B as provided in Section 14B of the 1952 Act. Now coming to another part of the claim which was admitted in the CIRP i.e. amount under Section 7Q amounting to Rs.75,62,576/- - the said amount is required to be paid by SRA to the Appellant. The SRA- Respondent No.3 is directed to make payment of amount of Rs.75,62,576/- within the period of two months from today to the Appellant which was admitted claim under Section 7Q - With regard to amount admitted under Section 14B of Rs.1,05,63,927/-, liberty granted to the SRA to make an application to the Central Board to waive 100% damages levelled under Section 14B. The impugned order passed by the Adjudicating Authority is affirmed. Issues Involved:1. Payment of Provident Fund Dues under Sections 7A, 7Q, and 14B of the Employees' Provident Funds & Miscellaneous Provisions Act, 1952.2. Timeliness and Implementation of the Resolution Plan.3. Waiver of Damages under Section 14B.Summary:1. Payment of Provident Fund Dues:The Appellant, Regional P.F. Commissioner, filed an appeal against the approval of the Resolution Plan by the Adjudicating Authority, which only proposed payment under Section 7A while excluding amounts under Sections 7Q and 14B. The Appellant argued that the entire amount towards provident fund dues, including those under Sections 7Q and 14B, were required to be paid. The Tribunal referenced the judgment in 'Jet Aircraft Maintenance Engineers Welfare Association vs. Ashish Chhawchharia' and the Supreme Court judgment in 'Maharashtra State Cooperative Bank Limited vs. Assistant Provident Fund Commissioner,' affirming that amounts under Sections 7Q and 14B are part of provident fund dues and must be paid in full.2. Timeliness and Implementation of the Resolution Plan:The Respondents argued that the appeal was filed more than nine months after the order, during which the Resolution Plan had already been implemented, and payments to all stakeholders, including the amount under Section 7A, had been made. The Tribunal noted that the implementation report was submitted on 02.02.2022 and that the SRA had paid all dues under Section 7A in full.3. Waiver of Damages under Section 14B:The Tribunal noted that the Central Board is empowered to waive damages under Section 14B of the 1952 Act. Referring to a similar case, 'Regional Provident Fund Commissioner vs. Shri Manish Kumar Bhagat,' the Tribunal allowed the SRA to apply to the Central Board for a waiver of 100% damages under Section 14B. The Tribunal directed the SRA to make an application within 30 days and for the Central Board to decide within three months.Final Directions:(i) The SRA is directed to pay Rs.75,62,576/- under Section 7Q within two months.(ii) The SRA is granted liberty to apply for a waiver of the amount under Section 14B. The application should be filed within 30 days, and the Central Board should decide within three months.The impugned order dated 11.05.2021 was affirmed, with each party bearing its own costs.