2026 (2) TMI 189 - AT - IBC

Provident Fund claims during insolvency moratorium ruled inadmissible; lower resolution plan payout upheld and appeal dismissed

Claims arising from assessments conducted after the insolvency moratorium are inadmissible under the moratorium; assessments made postinitiation were ... Claims based on assessments conducted during moratorium are inadmissible in CIRP - moratorium u/s 14 - clean slate doctrine - extinguishment of nonincorporated claims on approval of a resolution plan - commercial wisdom of the Committee of Creditors - inclusion of claims in the Information Memorandum - directory nature of procedural claim forms - Whether a lower pay out towards Provident Fund dues can be approved in the resolution plan. Perusal of the facts, show that on the basis of the analysis of books of accounts, no amount is shown to be payable as Provident Fund dues. - HELD THAT:- The resolution professional had noted the claim of the EPFO even though it was not filed in the prescribed format. And it was included in the Information Memorandum and the SRA had also acted upon that, therefore the facts of the case are distinguishable and the judgment cited by the Appellant will not be of any assistance to it. Perusal of the records reveal that even though the RP had advised the Appellant to file the claim in appropriate format, the Appellant had not filed them in those formats. Despite that Resolution Professional had included the claims in the Information Memorandum and the SRA has also provided for some amount for the EPFO. We find that in this case, it is not the case that the RP had not taken note of the claim of the EPFO. But RP included the claim in the Information Memorandum and also the SRA had made necessary provisions. Whether a lower pay out towards Provident Fund dues can be approved in the resolution plan. - We do not find anything which is contrary in the facts and circumstances of the case as the RP and also the Suspended Director had cooperated with the EPFO in its inquiry and assessment. But the moot point is that assessment cannot be done, once the moratorium comes into existence and therefore the cited case is also of no assistance. In this case, we find that there is no record to suggest that the Provident Fund was deducted contemporaneously by the CD and as no such record existed with the CD. An assessment was made later on by the EPFO basis which a demand has been made and such an assessment is not allowed under the moratorium existing. We have clearly noted the legal position that when the claim on the basis of assessment, which has been made subsequent to initiation of moratorium, is hit by Section 14, sub-section (1) of the IBC, we are of the view that no such claim can be admitted in the CIRP. Therefore, we find that the Appeal filed by the Appellant does not merit intervention for setting aside the impugned order dated 28.03.2025. Accordingly, the Appeal is hereby dismissed. Issues: Whether the Resolution Plan approved by the Adjudicating Authority, which provides a nominal payment towards a Provident Fund claim assessed by the statutory authority after commencement of CIRP and during the moratorium, is liable to be set aside on the ground that the EPFO's assessmentbased claim was not admissible in the CIRP.Analysis: The admitted facts show that the assessment and demand relied upon by the claimant were initiated/raised after commencement of the CIRP and during the moratorium period under Section 14. The Resolution Professional had invited and included available claims in the Information Memorandum; the Committee of Creditors evaluated and provisioned for the claim in the Resolution Plan, which also contains a contingent liability clause. Precedents and statutory scheme establish that assessment proceedings and fresh demands that seek to fasten pecuniary liability on the corporate debtor after initiation of CIRP are barred by the moratorium and cannot be admitted in the CIRP. The valuation and provisioning of claims by the Resolution Professional and acceptance by the Committee of Creditors reflect commercial wisdom entrusted to them and, where supported by the record, are not justiciable merely because a statutory authority subsequently arrived at an assessment during the moratorium.Conclusion: The impugned order approving the Resolution Plan is upheld and the appeal to set aside the plan insofar as it provides a nominal amount towards the contested Provident Fund claim is dismissed; the Resolution Plan remains binding and the postCIRP assessmentbased claim is not admissible in the CIRP.