2022 (8) TMI 417

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.... under Section 7Q of EPF & MP Act, 1952 demanding a payment to the tune of Rs. 6,43,84,526/- towards interest component and order dated 05.07.2019, passed under Section 147B of EPF & MP Act, demanding a payment for an amount of Rs. 13,02,25,964/- towards damages and penalty. Pursuant to the above stated orders, the Respondent has issued notices to the Corporate Debtor seeking recovery of the above stated amounts through notices dated 28.06.2020 and 07.07.2020. Both the notices have been called in question by the Liquidator vide its I.A No. 1086 of 2020 and I.A No. 1089 of 2020 respectively. 2. The brief facts are that the Corporate Insolvency Resolution Process("CIRP") initiated against the Corporate debtor vide order dated 01.08.2017 passed by this Adjudicating Authority and a moratorium was imposed under section 14 of the Code. Thereafter, pursuant to a public announcement issued by the Resolution Professional, Respondent submitted its Claim before the then Resolution Professional on 22.06.2018 for an amount Rs. 47,25,682/- (Rupees Forty-Seven Lakh Twenty-Five Thousand Six Hundred and Eighty Two Only) [Refer Pg. 45/I.A No. 1694 of 2020] for the period March 2012-October 2015 a....

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.... Fund dues are assessment proceedings and are not barred under section 14 of the Code. It is only on completion of the said assessment proceedings that a claim can be filed under the provisions of the Code. b. The dues of the Respondent are required to be paid in priority over all dues provided under section 11 of the EPF & MP Act as the said dues are excluded from the Liquidation Estate under section 36 of the Code. 6. The Applicant as well as the Respondent have filed their written submissions on the issues involved along with a list of judgments. The Respondents has vehemently, argued, and placed reliance on numerous judgments of National Company Law Tribunal and the Hon'ble Appellate Tribunal to contend that the dues of the Respondent are excluded from the Liquidation Estate and are required to be paid in priority. The said proposition has been strenuously disputed by the Applicant, contending that Section 36(4) provides protection to employee and workmen in relation to the dues "from" the Provident Fund, Gratuity Fund and Pension Fund and not form dues which are payable "to" the said Funds from the accounts of the Corporate Debtor. We need not to venture much into ....

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.... held to be inconsistent with Section 14 of the I&B Code'. Further reliance has been placed on Dewan Housing Finance Limited vs SEBI, [ Appeal No. 206 of 2020], wherein the Learned Securities Appellate Tribunal, Mumbai while quashing the show cause notice and assessment orders which were issued after moratorium, has held that where a moratorium has been declared under section 14 of the Code, the authority which in the instant case is SEBI/AO will have no jurisdiction to institute any proceedings. 10. In addition to the above, it has also been urged by the Applicant that as on the date no claims have been submitted by the EPF authorities claiming any dues under the EPF & MP Act and in case, any such claims are made, the Applicant shall deal with said claims in accordance with the provisions of the Code and the law enunciated by the Courts. It has also been contended that Respondent has failed to provide details of the employees P.F numbers and names of the workmen in respect of whom the alleged provident Fund dues are being claimed. It also has been averred that in absence of details of identified workmen and employees, no dues in the first place could exist. It has further been ....

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.... as judicial proceedings within the meaning of sections 193 and 228, and for the purpose of section 196, of Indian Penal Code. 14. Further, in case any amount is due or payable, the Respondent, in terms of provisions of the EPF & MP Act also imposes penalty and damages. The initiation of proceedings by the Respondent would therefore entail imposition of a pecuniary liability on the Corporate Debtor. This is exactly what is prohibited by the Code. The contention of the Respondent therefore that the proceedings initiated are mere assessment proceedings and are not barred under section 14 of the Code, is therefore liable to be rejected. 15. This contention is also liable to be rejected for another reason, the claims during Corporate insolvency Resolution Period are required to be filed within 14 days from the date of appointment of the interim resolution professional, in terms of Public Announcement issued under Regulation 6 of the IBBI Insolvency Resolution Process. Thus, the claims as on the Insolvency commencement date or 14 days thereafter are required to be filed. It is for this reason the Code provides for a stop on all proceedings to enable the Resolution professional to ....