Provident fund dues remain outside the liquidation waterfall and must be paid in full from available corporate assets.

Provident fund dues, including contribution, interest and damages, are treated as excluded from the liquidation estate under the Insolvency and Bankruptcy Code and are not subjected to distribution under the waterfall in Section 53. The Tribunal states that EPF-related claims under Sections 7A, 7Q and 14B must be paid in full from funds available with the corporate debtor, and any shortfall may be met from its assets before the balance enters liquidation. It also directs removal of attachment over the corporate debtor's bank accounts to enable payment of these statutory dues.

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Issues: Whether provident fund dues under the EPF Act, including contribution, interest and damages, are excluded from the liquidation estate and payable in full outside the waterfall under the IBC, and whether attachment of the corporate debtor's bank accounts could be lifted with directions to pay such dues from available funds.

Analysis: Section 36(4)(a)(iii) of the Insolvency and Bankruptcy Code, 2016 excludes sums due to workmen and employees from provident fund, pension fund and gratuity fund from the liquidation estate. The EPF Act also gives statutory priority to amounts due from the employer, including contribution, interest and damages. The Tribunal followed its earlier view that provident fund-related dues are not to be subjected to distribution under Section 53 of the Code and that the words "if any available" do not dilute the entitlement to full payment of such dues. It further held that the claims under Sections 7A, 7Q and 14B of the EPF Act form part of provident fund dues and must be satisfied in full from the funds available with the corporate debtor, with any shortfall met from the debtor's assets before the balance enters the liquidation estate.

Conclusion: Provident fund dues, including contribution, interest and damages, were held payable in full outside the liquidation waterfall, and the attachment on the corporate debtor's bank accounts was directed to be removed so that payment could be made to the EPFO authorities.

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