TaxTMI 
TaxTMI 
2026 (9) TMI 205
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....he Petitioner company, which came to be admitted by the National Company Law Tribunal and, vide order dated 16th July 2020, the Corporate Insolvency Resolution Process ("CIRP") was initiated. Under the provisions of IBC, the Interim Resolution Professional was appointed and a public announcement was made inviting claims from all creditors on 22nd July 2020. In response to the public announcement, the Respondent No. 2, on 7th May 2021, submitted its claim of Rs. 2,24,98,772/-. The claim was verified and admitted by the Resolution Professional in full. After issuance of Form G and scrutiny of the resolution plans received from the interested parties, the Committee of Creditors, in its CoC meeting held on 7th February 2022, approved the final resolution plan submitted by one M/s. Deep Industries Limited. The resolution plan came to be approved by the National Company Law Tribunal ('NCLT') by its order passed on 29th September 2022. In terms thereof, the management of the corporate debtor was transferred to the Resolution Applicant. In accordance with the approved resolution plan, the Respondent No. 2 was paid an amount of Rs. 2,250/- in full and final settlement of the claim. 4. Pr....
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....torium period is non est. He would further submit that in the case of Employees' Provident Fund Organization vs. Subhlaxmi Investment Advisory Pvt. Ltd. & Anr. (supra), the decision of the Bombay High Court, Nagpur Bench, in the case of Dalmia Cement (Bharat) Limited vs. The Central Board of Trustees, Employees Provident Fund Organization MANU/MH/2645/2025, decided on 29th April 2025, was distinguished on the ground that in that case, the Resolution Professional had not taken note of the claim of the Provident Fund Organization. He submits that in the present case, an identical factual scenario exists, inasmuch as, the Respondent No. 2 had lodged its claim with the Resolution Professional and a treatment has been given in the resolution plan. He submits that the Respondent No. 2 did not challenge the resolution plan and, having accepted the same, could not have continued with the inquiry under Section 7A of the Provident Fund Act and assessed the dues. 6. He would further submit that Sub Section (6) to Section 31 came to be introduced on 26th May, 2026, which renders the impugned Section 7A inquiry without jurisdiction. He submits that the amendment has retrospective effect and ....
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....Division Bench of this Court, Nagpur Bench, in the case of Dalmia Cement (Bharat) Limited (supra), and that the Hon'ble Division Bench has held that the provident fund dues of an employee do not fall within the meaning of operational debt as defined in Section 5(21) of IBC and, therefore, would not be a claim to be included in the resolution plan, non-inclusion of which would result in the liability being wiped out in terms of what has been held in the decision of Ghanashyam Mishra (supra). He submits that once it is held that the provident fund contribution is not an asset of the corporate debtor and does not constitute a debt, the decision of Ghanashyam Mishra (supra) would not apply to wipe out the assessment of the provident fund contribution. He would further submit that the assessment of the dues under Section 7A of the Provident Fund Act was for a period from April 2018 to September 2019 i.e. even prior to the corporate insolvency resolution process. 8. Rival contentions now fall for determination: 9. The facts are undisputed. The impugned order is assailed on three grounds firstly that the inquiry under Section 7A continued during the moratorium period and hence are n....
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....s the approval of the Resolution Plan in which the Respondent No. 2's claim was approved for sum of Rs. 2,250/-. Despite the imposition of moratorium, the Respondent No. 2 proceeded with the Section 7A inquiry and after the approval of the resolution plan, the impugned order came to be passed on 24th February, 2023. 13. In the case of Employees' Provident Fund Organization vs. Jaykumar Pesumal Arlani (supra) the NCLAT dealt with an identical issue as to whether the assessment proceedings can be carried on by the EPFO after imposition of moratorium under Section 14 of IBC. Noting the statutory provisions and the judicial pronouncements, the NCLAT opined in paragraph 24 that after initiation of moratorium under Section 14 sub-Section (1) no assessment proceedings can be continued by the EPFO. If after an order of liquidation is passed, Section 33, subsection (5) does not prohibit initiation or continuation of assessment proceedings. The view of NCLAT in Employees' Provident Fund Organization vs. Jaykumar Pesumal Arlani (supra) was thereafter followed by the NCLAT in the case of Employees' Provident Fund Organization vs. Subhlaxmi Investment Advisory Pvt. Ltd. & Anr. (supra). 14....
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....t have the power to initiate recovery of dues by means of sale/confiscation, as provided under the Customs Act. b) Whether the Respondent could claim title over the goods and issue notice to sell the goods in terms of the Customs Act when the liquidation process has been initiated? answered in negative. 54. On the basis of the above discussions, following are our conclusions : i) Once moratorium is imposed in terms of Sections 14 or 33(5) of the IBC as the case may be, the Respondent authority only has a limited jurisdiction to assess/determine the quantum of customs duty and other levies. The Respondent authority does not have the power to initiate recovery of dues by means of sale/confiscation, as provided under the Customs Act. ii) After such assessment, the Respondent authority has to submit its claims (concerning customs dues/operational debt) in terms of the procedure laid down, in strict compliance of the time periods prescribed under the IBC, before the adjudicating authority. iii) In any case, the IRP/RP/liquidator can immediately secure goods from the Respondent authority to be dealt with appropriately, in terms of the IBC." ....
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....tion I.-For the purposes of this section, it is hereby clarified that nothing in this section shall affect a claim or any proceeding in respect of a person who was a promoter or in the management or control of the corporate debtor, a guarantor of the corporate debtor or any person having a joint liability or a joint and several liability with the corporate debtor, as the case may be. Explanation II.-For the purposes of this section, it is hereby clarified that if a person has a joint liability or a joint and several liability with the corporate debtor for payment of debt owed to a creditor before the approval of resolution plan, and such person makes a payment for such debt after the approval of the resolution plan, then any right of such person to be indemnified by the corporate debtor shall be extinguished. Explanation III.-For the removal of doubts, it is hereby clarified that the provisions of sub-sections (5) and (6) shall be deemed to apply to the resolution plan that is approved under sub-section (1), on and from the date of commencement of this Code, except for matters that have attained finality under this Code.". 19. Sub-section (6) has the effect of ....
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....esolution plan before NCLAT and demand full payment of the provident fund dues. The decisions which have been relied upon by Mr. Chaubey arises out of appeal proceedings before the NCLAT. The Respondent No. 2 herein did not challenge the resolution plan and instead continued with 7A inquiry. 22. In Dalmia Cement (Bharat) Limited (supra) the Hon'ble Division Bench of this Court was considering the exception taken to the claim of the Provident Fund department to recover PF dues of the employees which are not part of the resolution plan. In that case, there was no proof of claim filed by the EPFO and resultantly the dues were not made part of the resolution plan. The contention raised therein was that after the approval of the resolution plan, it was not permissible for the Respondent to raise the claim as it stood extinguished. In that case, there was Section 7A order passed and the challenge to the demand notice was given up restricting the issue to the extinguishment of claim of EPFO upon approval of the resolution plan. The Hon'ble Division Bench also considered the plea that PF dues cannot form part of the resolution plan. The Hon'ble Division Bench held that the Employees Pro....