19 Aug 2023 5:15 AM GMT
The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising of Shri Kuldip Kumar Kareer (Judicial Member) and Smt. Anuradha Sanjay Bhatia (Technical Member), while adjudicating an application filed in Small Industrial Development Bank of India v E & G Global Estates Limited, has refused to admit the claim of Employee Provident Fund Organization (EPFO), which was...
The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising of Shri Kuldip Kumar Kareer (Judicial Member) and Smt. Anuradha Sanjay Bhatia (Technical Member), while adjudicating an application filed in Small Industrial Development Bank of India v E & G Global Estates Limited, has refused to admit the claim of Employee Provident Fund Organization (EPFO), which was submitted belatedly after the approval of resolution plan by the Committee of Creditors.
“In view of the above discussion this bench is of the considered view that at this belated stage when the Resolution plan has already been approved by the members of the COC in its 8th meeting dated 20.04.2021, the belated claim filed by the Applicant cannot be entertained, as such claims would defeat the very purpose of the CIRP process which is supposed to conclude in a time bound manner.”
On 24.06.2020, M/s E & G Global Estates Limited (“Corporate Debtor”) was admitted into Corporate Insolvency Resolution Process (CIRP) by the NCLT. The Interim Resolution Professional (“IRP”) published a public announcement on 26.06.2020 and the last date for the creditors to submit their claims was 08.07.2020. Thereafter, a resolution plan was submitted for the Corporate Debtor which was approved by the Committee of Creditors (“CoC”) and was pending before the NCLT for approval.
The Employees Provident Fund Organization (“EPFO/Applicant”) is constituted under the Employees Provident Fund and Miscellaneous Provisions Act 1952. On 24.06.2021, the Regional Provident Fund Commissioner passed an order for recovery of Rs. 3.79 Crores from the Corporate Debtor against outstanding dues.
The Applicant submitted its claim before the Resolution Professional on 28.10.2021 after 447 days of delay. It was contended that the Corporate Debtor failed to submit its employees Provident Fund contribution amount to the ‘Provident Fund’. Therefore, the claim filed by the PF Commissioner represents the claim of the employees and workmen in respect of their claim for provident fund. The Applicant further contended that it did not receive any information from the IRP regarding CIRP commencement and the claim was filed immediately after it became aware of the CIRP.
On 30.10.2021, the Resolution Professional refused to accept the Applicant’s claim on the ground that the CoC has already approved the resolution plan and the same is pending before the NCLT for approval.
The Applicant filed an application before NCLT seeking a direction to the Resolution Professional to accept the claim and condone the delay in filing of the same.
The Bench observed that in due process of law, whenever IRP is appointed, it sends an intimation to all the creditors and competent authorities for their statutory dues. IRP also makes paper publication for inviting the claims from the stakeholders in leading newspapers.
The IRP had sent an intimation to the EPFO along with the Publication of notice dated 26.06.2020 in English Newspapers, inviting claims from the creditors of the Corporate Debtor. Therefore, the contention of the Applicant that they were not informed about the CIRP process cannot sustain.
Further, the Bench cannot come to the rescue of those who are sleeping over their rights or are not duly aware of their rights. The Applicant’s claim was submitted after a delay of 477 days.
“In the present case the Applicant had been dormant for more than a year for approx. 477 days, before filing their claims on 28.10.2021, when the COC had already approved the Resolution Plan in its 8th COC meeting held on 20.04.2021 submitted by Mrs. Asha Shivaji Sanap.”
It was further observed that the order passed by the Regional Provident Fund Commissioner on 24.06.2021 was hit by moratorium since the Corporate Debtor was already into CIRP.
“Besides, the order for recovery of the outstanding dues amounting to Rs. 3.79 crore was passed by the EPFO (The -II, Nasik, Maharashtra) on 24.06.2021 whereas the Corporate Debtor was admitted to CIRP on 24.06.2020, thus the order is hit by Section 14 of the IBC.”
The Bench dismissed the application while holding that post approval of the resolution plan by the CoC, the belated claim of the Applicant cannot be entertained. As such claims would defeat the objective of time bound resolution.
Case Title: Small Industrial Development Bank of India v E & G Global Estates Limited
Case No.: CP (IB) No. 2995/MB/2019
Counsel for Applicant: Mr. Suresh Kumar, Advocate
Counsel for Respondent (RP): PCA Ayush Rajani a/w Khushboo Shah i/b AKR Advisors.
Click Here To Read/Download Order