Company Appeal (AT) (CH) (Ins.) No. 50 of 2021

Decided On: 12.05.2021

Appellants: Regional Provident Commissioner Employees Provident Fund Organisation Vs. Respondent: Vandana Garg, RP of GVR Savarkar Marg and Ors.

Hon'ble Judges/Coram:
Venugopal M., J. (Member (J)) and V.P. Singh


V.P. Singh, Member (T)

1. This Appeal emanates from the Order dated July 20, 2020, passed by the National Company Law Tribunal, Chennai Bench, Chennai in MA No. 1433 of 2019 in CP/941/IB/2018, whereby the Adjudicating Authority/NCLT approved the Resolution Plan, which waves off a major portion of the Provident Fund dues owed by the Corporate Debtor. The original parties status in the Company Petition represents them in this Appeal for the sake of convenience.

Brief facts:

2. The Corporate Debtor M/s. GVR Infra Projects Limited had defaulted in payment of dues/damages/interest, including employees share of contributions, since April 2014, which were deducted from their wages. The total EPF dues up to the date are to the tune of ` 2,84,69,797/-.

3. The Adjudicating Authority had vide its Order dated October 15, 2018, initiated CIR Process against the Corporate Debtor 'GVR Infra Projects Limited'. Under the same, the Interim Resolution Professional (in short, 'IRP') issued a public announcement inviting claims pending against the Corporate Debtor. The Interim Resolution Professional was subsequently replaced by Respondent No. 1, appointed as the Resolution Professional (in short, 'RP').

4. The Appellant submitted its claims in Form 'F', as suggested by the IRP vide his letter dated December 31, 2018. The claim Form 'F' was forwarded to the Resolution Professional on January 7, 2019. The RP, vide an email dated May 10, 2019, asked the Appellant to submit its claim and the supporting documents in Form 'B' again. In response to that, the Appellant submitted the claim in Form 'B', under protest to Respondent No. 1/RP, along with all supporting documents vide its letter dated May 22, 2019.

5. After that, Respondent No. 1/RP vide letter dated January 22, 2020, has informed that the claim in form 'B' for the period from April 2014 to October 2017 amounting to ` 1,95,01,301/- is admitted to be paid when the prospective bidder takes over M/s. GVR Infra Projects Limited. The RP further communicated that the PF dues from May 2017 to April 2019 of the Corporate Debtor had been admitted. As per the dues settlement, as forwarded by the Resolution Professional, the Corporate Debtor had to remit the total of ` 75,14,594/- from November 2017 to April 2019. However, out of these dues of ` 75,14,594/-, only dues amounting to ` 9,48,183/- was admitted.

6. The Appellant, vide its letter dated August 13, 2020, sought clarification from the RP regarding the amount payable to the Appellant. Then the RP responded that the claim already admitted would be settled as per the Resolution Plan.

7. The Appellant contends that waving off the Provident Fund dues is not only the violation of Section 11 of the Employees Provident Fund Act (EPF Act), which lays down the priority of charge of Provident Fund dues but also a violation of Section 36(4)(a)(iii) and Section 30(2)(e) of The Insolvency and Bankruptcy Code 2016 which lays down that the Provident Fund dues are outside Liquidation Estate.

Respondent's contention

8. The Corporate Insolvency Resolution Process against the Corporate Debtor 'GVR Infra Projects Limited' was initiated by the Adjudicating Authority vide Order dated October 15, 2018. After that, IRP/RP was appointed. During the CIRP under the public announcement, the Appellant submitted the claim in Form 'B' for an amount of ` 1,95,01,301/- about the outstanding Provident Fund dues to Respondent No. 1, which Respondent No. 1/RP admitted in total.

9. Respondent No. 2 submitted a Resolution Plan to the Committee of........