Consortium Led By Syonira Invecast Pvt. ... vs Employeesâ’ Provident Fund ...

(Arising against the Impugned order dated 09.10.2024 passed by the Learned Adjudicating Authority, Mumbai Bench, in I.A No. 1745 of 2022 in Company Petition (IB) No.281/2019)

IN THE MATTER OF:

Consortium led by Syonira Invecast Pvt. Ltd Having its office at: D 302, Rosewood Heights. Sector 10, Kharghar, Navi Murnbai-410210. . . . Appellant Versus

1. Employees' Provident Fund Organisation Bhavishya Nidhi Uhavan, 24, Patto Plaza Panaji, Goa--403001. Email:- ro.gao@epfindia.gov.in

2. Mr. Anil Seetaram Vaidya Erstwhile Resolution Professional and Chairman of Monitoring Committee of Goa Invescast Ltd. Having his registered office at Plot No. 107, Survey No. 62/65 Mahatma Society, Bhusari Colony, Kothrud. Pune-411 308, Email:- anilvaidya38@gmail.com ....Respondents

Present:

For Appellant: Ms. Anjali Sharma, Ms. Thanglunkim, Mr. Gaikhunalung, Advocates.

For Respondents: Mr. Kaushal Gautam, Ms. Snehpreet Kaur, Ms. Vanshika Singh, Mr. Hemant Dalal, Advocates.

Cont'd..../ -2-

With

Company Appeal (AT) (Insolvency) No. 141 of 2025

(Arising against the Impugned order dated 09.10.2024 passed by the Learned Adjudicating Authority, Mumbai Bench, in I.A No. 1745 of 2022 in Company Petition (IB) No.281/2019)

IN THE MATTER OF:

Employees' Provident Fund Organisation Bhavishya Nidhi Uhavan, 24, Patto Plaza Panaji, Goa--403001.

Email:- ro.gao@epfindia.gov.in ...Appellant

Versus

1. Consortium led by Syonira Invecast Pvt. Ltd Having its office at:

D 302, Rosewood Heights.

Sector 10, Kharghar, Navi Murnbai-410210 ...Respondent/SRA

2. Mr. Anil Seetaram Vaidya

Erstwhile Resolution Professional and Chairman of Monitoring Committee of Goa Invescast Ltd. Having his registered office at Plot No. 107, Survey No. 62/65 Mahatma Society, Bhusari Colony, Kothrud. Pune-411 308, Email:- anilvaidya38@gmail.com .....Respondents

Present:

For Appellant: Mr. Kaushal Gautam, Ms. Snehpreet Kaur, Ms. Vanshika Singh, Mr. Hemant Dalal, Advocates. For Respondents: Ms. Anjali Sharma, Ms. Thanglunkim, Mr. Gaikhunalung, Advocates.

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -3-

J U D G M EN T (9th January, 2026)

INDEVAR PANDEY, MEMBER (T)

These two Appeals arise out of the same order dated 09.10.2024

passed by the Adjudicating Authority (National Company Law Tribunal,

Mumbai Bench-III), in IA No. 1745 of 2022 in C.P. No. 281/MB/C-III/2019.

The First appeal, Comp. App. (AT) (Ins.) No. 2319 of 2024 has been preferred

by the Consortium led by Syonira Invecast Pvt. Ltd., the Successful

Resolution Applicant, and the Second appeal, Comp. App. (AT) (Ins.) No.

141 of 2025 has been filed by the Employees' Provident Fund Organisation

(EPFO). Both the parties are aggrieved by the impugned order passed by

Adjudicating Authority in I.A. No. 1745 of 2022 and have assailed the same

before this Appellate Tribunal.

2. The issue in I.A. No. 1745 of 2022 related to the portion of the claim

of EPFO, which was submitted subsequent to the approval of the Resolution

Plan on 09.11.2021 by the Adjudicating Authority. The appeals herein are

cross appeals; the first filed by SRA against the enhanced claim made by the

EPFO after the approval of resolution plan, and the second by the EPFO

against the non-payment of additional amount of interest under Section 7

(Q) of EPF Act and damages chargeable under Section 14B of EPF Act. As

both appeals arise from the same impugned order, hence, both the appeals

are being taken for disposal together. We would treat the first appeal as the

main appeal for disposal of both the cases and the references to the parties

henceforth would be as per the first appeal.

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -4-

3. Brief facts of the case necessary to decide these Appeals are as under:

i. The Corporate Insolvency Resolution Process (CIRP) of the M/S Goa

Invescast Ltd./Corporate Debtor was initiated by Steel and Scrap Pvt.

Ltd. pursuant to which the C.P. No. 281/MB/C-III/2019, was

admitted by the Adjudicating Authority and Vinit Gangawal was

appointed as the Interim Resolution Professional. Later on, Mr. Anil

Seetaram Vaidya was appointed as Resolution Professional (RP) on

09.10.2019 and he has been arrayed as Respondent No. 2 in both the

appeals.

ii. During the CIRP, the Employees' Provident Fund Organisation

(EPFO)/Respondent No.1 submitted its claim in Form B dated

24.09.2019, claiming Rs. 17.90 lakhs, which was also reflected in the

Information Memorandum prepared by the Resolution

Professional/Respondent No. 2. In the 5th CoC Meeting held on

02.03.2020, the Respondent No. 2 orally informed the Appellant/SRA

that the PF liability was Rs. 63.15 lakhs and advised revision of the

Resolution Plan. Consequently, the Resolution Plan was revised to

provide Rs. 63.15 lakhs towards PF liabilities as full and final

settlement.

iii. In the 8th CoC meeting held on 20.11.2020, the Resolution Plan of a

consortium led by Syonira Invecast Pvt. Ltd. (Appellant herein) was

approved unanimously by the CoC with 100% voting share. The

Resolution Plan submitted by the Successful Resolution Applicant

(SRA)/ Appellant was subsequently approved by the Adjudicating

Authority vide order dated 09.11.2021.

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -5-

iv. In compliance with the approved Plan, the said amount of Rs. 63.15

lakhs were remitted to the PF authorities in the following manner:

(a) Rs. 44,67,551/- through ECR (online mode) and (b) Rs. 18,47,449/-

through Cheque No. 000511 dated 25.03.2022. The Appellant

informed Respondent No. 1/EPFO (vide a letter dated 25.03.2022) that

the said payment was made towards full and final settlement, and that

no new or additional claim could be imposed upon the Appellant in

future.

v. Respondent No. 1, vide its letter dated 06.04.2022, stated that the

amount paid by the Appellant had been adjusted towards damages,

interest, short remittance, and contributions, pursuant to an order

dated 06.04.2021 passed under Section 7A of the EPF & MP Act. It

was further stated that an amount of Rs. 1,13,482/- still remained

unpaid in compliance with the said quasi-judicial order.

vi. Respondent No. 1 thereafter issued a notice dated 29.04.2022

demanding payment of Rs. 1,13,482/- and further directed the

Appellant to file an application for waiver of damages before the

Central Board of Trustees, EPFO, failing which action under the

provisions of the EPF & MP Act was threatened.

vii. The Appellant issued a letter dated 17.05.2022 refuting its liability to

pay any additional amounts claimed by Respondent No. 1 after

approval of the Resolution Plan.

viii. Respondent No. 1 issued summons dated 18.05.2022, claiming fresh

dues amounting to Rs. 62,09,154/- for the period 01.04.2015 to

30.06.2019. This fresh claim of Rs. 62,09,154/- was not made at any

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -6-

occasion prior to approval of the resolution plan and accordingly was

not reflected in the approved Resolution Plan.

ix. The Appellant thereafter filed an application under Section 60(5) of the

Insolvency and Bankruptcy Code, 2016, on 22.06.2022, being I.A. No.

1745 of 2022 before the Adjudicating Authority, praying for following

reliefs:

"a. Squash and set aside the notice bearing Reference Number 2021-22/ENF/50204/10880/676 dated 29.04.2022 issued by Respondent No. 1 which is issued after approving of Resolution Plan.

b. Squash and set aside the Summons vide Ref No. GA/GOA/0010880/000/Enf 502/Damages/703 issued by

Respondent No. 1 dated 18.05.2022 issued approving of Resolution Plan.

c. Prohibit Respondent No 1 from undertaking any recovery action against the Applicant for the PF dues, interest and damages for the period prior to the approval of the Resolution Plan. d. Direct the Respondent no 1 to refund the amount of Re. 45.25 lakhs paid in excess of the amount claimed by the Respondent no 1 in form B dated 24.09.2019.

e. Grant any other relief as the Hon'ble Tribunal may deem fit and proper under the circumstances."

x. The Respondent No. 1/EPFO filed a reply to I.A. No. 1745 of 2022 with

the following prayers:

"(a) Dismiss the Application of the Applicant and direct the Applicant to remit the provident Fund dues as Provident Fund is a welfare measure for the class of workers;

(b) The Hon'ble Tribunal is request to set aside the plea of the Applicant because of the Establishment has an alternative

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -7-

remedy under the EPF & MP Act, l952 to challenge the orders passed by this Respondent.

(c) pass such order and other orders as this Hon'ble Tribunal may deem fit and proper."

4. The Ld. Adjudicating Authority passed the impugned order dated

09.10.2024, which noted that the EPFO had raised multiple and successive

claims under Sections 7A, 7Q and 14B of EPF and MP Act by issuing different

orders and summons at various stages, the details whereof are summarised

in the table below.

S.No. Order date Section Period Amount Claimed 1. 06.04.2021 7A (1) (b) 03/2013, 02/2016 34,23,474/- to 03/2016, 06/2016 to 06/2019 2. 13.09.2019 7Q 12/2012 to 01/2018 5,53,733/- 3. 13.09.2019 14B 12/2012 to 01/2018 11,19,628/-

S.No. Date of Summon Period Total amount issued by EPF Claimed Amount 1. 18.05.2022 01/04/2015 to Total 30/06/2019 Rs. 62,09,154/- i.e. Damages of Rs.39,99,546/- and Interest of Rs.22,09,608/-

5. The Adjudicating Authority heard I.A. No. 1745 of 2022 filed by the

Successful Resolution Applicant and, vide the impugned order dated

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -8-

09.10.2024, partly allowed the said application. The relevant paras 46 to 54

of the impugned order are extracted below:

"46. It is noteworthy here that the claim filed by the EPFO Authorities before the interim Resolution Professional was only to the tune of Rs. 17.90 lakhs as against which an amount of Rs. 63.l5/ - lakhs has been paid to them. This amount of Rs. 63.15 lakhs which has been undisputedly received by the EPFO Authorities covers the entire amount of the PF dues u/s 7A as also the interest there on levied u/s 7Q and as are evident from all the documents and correspondence enclosed with the petition as also with the affidavit in reply arc satisfied. Thus, only amount which is remains outstanding is towards the damages.

47. It is the submission of the EPFO Authorities that after the amount under 7-A as also the amount of the interest is paid then the SRA could be advised to make a petition/application before the Central Board of Trustees EPFO for waiver of damages.

48. It is to note that the Respondent No. 1 has made various legal submission legal submissions vide various case laws, however, in respect of the same it is stated that no differential opinion or position is being taken here in this case.

49. As the entire amount u/s 7A and interest levied under 7Q has been determined to have been paid, the SRA is directed to make appropriate application / petition before the Central Board of Trustees EPFO for waiver of the damages levied on the erstwhile CD.

50. We rely on the judgement of the Hon'ble NCLAT in Regional provident Fund Commissioner, Vatwa, Employees provident Fund Organization Vs. Shri Manish Kumar Bhagat Company Appeal (AT) (Insolvency) No. 8O8 of 2O22, decided on 11.10.2O23, wherein the issue with the Hon'ble NCLAT was Whether or not to direct the Successful Resolution Applicant for payment of inter alia damages under Section 14B of EPF Act. Damages u/s 14B arose on account of

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -9-

assessment on 14.10.2019 for an amount of Rs. 68,54,869/- and 25.07.2017 for an amount of Rs. 31,16,446/-. The Hon'ble NCLAT held that the damages imposed by order dated 18.10.2019 was subsequent to CIRP imposition of moratorium and held that no direction need to be issued for payment of damages under Section 14B. As far as damages amounting to Rs.31,16,446/- which was imposed by order dated 25.07.2OI7, prior to the commencement of the CIRP moratorium, the Hon'ble NCLAT directed the Successful Resolution Applicant (SRA) to pray to the Central Board to waive 100% damages of Rs. 31,16,446/- imposed by order dated 25.07.2017 under Section 14B within a period of one month

51. In view of the facts and circumstances of the case and discussion hereinabove the EPFO Authorities are directed not to take any coercive action for any recovery of the EPFO dues from the SRA. Accordingly prayer (c) is allowed, subject to applicant filing an application praying to Central Board of Trustee Employee Provident Fund within 30 days of this order.

52. In regard to Prayer a and b it is stated that this Tribunal does not have power to Quash or set aside notices and summons issued by the Applicant. Hence these prayers are rejected.

53. As regards Prayer d which seeks to get a refund of Rs. 42.25 lacs on account of damages paid to the EPFO, it is stated that the facts of the case as have been captured hereinabove do not suggest so, hence rejected.

54. Further, thereto any amount which is paid consequent to the Resolution Plan approved by the Adjudicating Authority is binding on the stakeholders including the SRA and therefore, the SRA cannot have any liberty to seek any amount as a refund which has been paid in consonance and in accordance with the plan approved by the Adjudicating Authority."

6. The Adjudicating Authority held that the amount payable under Section

7A stood crystallised at Rs.34,23,474/- and that the remaining amounts Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -10-

claimed by the EPFO pertained only to interest under Section 7Q and damages

under Section 14B. It was held that the total PF dues under Section 7A

together with interest under Section 7Q amounted to Rs. 61,86,815/-, against

which an undisputed payment of Rs. 63.15 lakhs had already been made by

the Successful Resolution Applicant, thereby fully satisfying the PF dues and

interest. The Adjudicating Authority further observed that the demand of Rs.

1,13,482/- arose only due to adjustment made by the EPFO and that even the

differential amount could be treated as adjusted towards damages, leaving

only damages under Section 14B as outstanding. With respect to the issue of

damages, the Adjudicating Authority held that once the amounts under

Sections 7A and 7Q stood fully paid, the Successful Resolution Applicant could

be advised to approach the Central Board of Trustees, EPFO for waiver of

damages under Section 14B. Relying upon the judgment of this Hon'ble

Appellate Tribunal in Regional Provident Fund Commissioner v. Shri Manish

Kumar Bhagat and the judgment of the Hon'ble Supreme Court in Ghanshyam

Mishra and Sons Pvt. Ltd. v. Edelweiss ARC, the Adjudicating Authority

directed the EPFO not to take any coercive recovery action, however, it rejected

the prayers of SRA seeking quashing of notices and summons on the ground

of lack of jurisdiction; and seeking refund of additional amounts paid. The

Adjudicating Authority further held that payments made under an approved

Resolution Plan are binding on all stakeholders. Accordingly, the application

was partly allowed and disposed of.

7. Aggrieved by the impugned order dated 09.10.2024, these Appeals have

been filed. The first appeal Company Appeal (AT) (Ins) No. 2319 of 2024 has

been filed by the Consortium led by Syonira Invecast Pvt. Ltd, the Successful

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -11-

Resolution Applicant, challenging the order passed in I.A. No. 1745 of 2022.

In the Appeal, following prayers have been made:-

"a) Set aside the impugned order dated 09.10.2024 passed by the Hon'ble National Company Law Tribunal Mumbai Bench -III in I. A. No. 1745 of 2022 in C.P. No. 281 of 2019, in so far as it fails to hold that the damages levied by the Respondent No. 1 pursuant to assessment post the approval of resolution plan need not be paid by the Appellant; and fails to recommend waiver of damages levied during the CIRP period for period/s prior to commencement of CIRP; and

(b) Direct that the amount paid by the Appellant to the Respondent No. 1 that was in excess of its claim (whether original/revised) be refunded to the Appellant.

(c) Such other order or orders as may be deemed fit in the circumstances may also be passed."

8. The second Company Appeal (AT) (Ins.) No. 141 of 2024 has been filed

by the EPFO challenging the impugned order dated 09.10.2024 passed in I.A.

No. 1745 of 2022, where the following prayers have been made: -

"(a) Appeal be allowed;

(b) Impugned Order dated 09/10/2024. in IA No. 1745 of 2022 in CP. (IB) NO. 281/MB/C-III/2019 by the Hon'ble NCLT, Mumbai Bench, be set aside and/or modified to include the claim of the Appellant at priority;

(c) Pending the final hearing and disposal or the Appeal the Impugned Order dated 09/10/2024, in IA No. 1745 of 2022 in CP. (IB) NO. 281/MB/C-III/2019 by the Hon'ble NCLT, Mumbai Bench, be stayed;

(d) Direct the Respondents herein lo consider the claim or the Appellant in priority as per the provision or me and IBC and EPF & MP Act, 1952;

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -12-

(e) Interim and ad-interim reliefs in terms of prayer clause (a) to

(e) above;

(f) Such other and further reliefs as this Hon'ble Court deem fit and proper;"

9. We would take up the first appeal and decision of the same would apply

automatically to the second appeal as these are cross appeals filed against

the same impugned order and relate to the same issue.

Submission of the appellant

10. The Ld. Counsel for the Appellant submits that the present appeal has

been preferred against the Impugned Order dated 09.10.2024 passed by the

Adjudicating Authority. The Appellant, being the Successful Resolution

Applicant, had inter alia sought quashing and setting aside of the notice

dated 29.04.2022 and summons dated 18.05.2022 issued by Respondent No.

1 (EPFO Goa), on the ground that the said demands pertained to alleged dues

raised after approval of the Resolution Plan and pursuant to proceedings

initiated and orders passed during the CIRP period, despite no claim having

ever been filed for such amounts. Consequently, the amounts now sought to

be recovered do not find any place in the approved Resolution Plan.

11. Ld. Counsel submits that notwithstanding the Plan Approval Order

dated 09.11.2021, Respondent No. 1 issued the Notice dated 29.04.2022 and

Summons dated 18.05.2022, demanding payment of dues for the period

01.04.2015 to 30.06.2019 i.e., for a period prior to commencement of CIRP,

on the basis of proceedings initiated and an order dated 06.04.2021 passed

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -13-

during the subsistence of moratorium. The moratorium under Section 14

came into effect on 04.07.2019 and continued until 09.11.2021; hence, such

proceedings and orders were non est in law. It was in these circumstances

that the Appellant filed I.A. No. 1745 of 2022, in which the Impugned Order

came to be passed.

12. Referring to the Impugned Order, Ld. Counsel draws attention to the

portion titled "Analysis & Findings", wherein, at Para 44, the Adjudicating

Authority noted that PF dues under Sections 7-A and interest under Section

7-Q aggregated to Rs. 61,86,815/-, against which payment of Rs.63,15,000/-

had already been made. Further, at Para 46, it was observed that the only

outstanding component pertained to damages. Thereafter, relying on the

judgment of this Hon'ble Tribunal in 'Regional Provident Fund Commissioner,

Vatwa, EPFO v. Shri Manish Kumar Bhagal, [2023 SCC OnLine NCLAT 2176],

the Adjudicating Authority, held that damages imposed under Section 14-B

during the moratorium period were not payable; however, for damages

imposed prior to the moratorium, the SRA was required to approach the

Central Board of Trustees for waiver. Accordingly, the Appellant was directed

to file an application before the Central Board within 30 days.

13. Ld. Counsel further submitted that the Adjudicating Authority failed to

appreciate that the damages sought to be recovered through the Notice dated

29.04.2022 and Summons dated 18.05.2022, were based on proceedings and

an order dated 06.04.2021, both undertaken during the subsistence of

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -14-

moratorium 'and in respect of which no claim had ever been submitted. The

CIRP of the Corporate Debtor commenced on 04.07.2019 and continued until

approval of the Resolution Plan on 09.11.2021. Since Respondent No. 1 never

filed any claim for the amounts now demanded, the same do not form part of

the approved Resolution Plan.

14. Ld. Counsel submitted that the Impugned Order is contrary to the

judgment of this Hon'ble Tribunal in 'Employees Provident Fund Organization

v. Jaykumar Pesumal Arlani, [2025 SCC OnLine NCLAT 9]', wherein it was

categorically held that no claim can be enforced on the basis of an

assessment carried out during the moratorium under Section 14(1) of the

IBC. Ld. Counsel for the Appellant further submitted that, in view of the

judgment of the Hon'ble Supreme Court in 'Ghanashyam Mishra and Sons

Pvt. Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., [(2021) 9 SCC 657]', any

claim which does not form part of the approved Resolution Plan stands

irrevocably extinguished. Accordingly, the amounts demanded by

Respondent No. 1 vide notice dated 29.04.2022 and summons dated

18.05.2022 being absent from the approved Resolution Plan, cannot be

revived or pressed against the Appellant.

15. Ld. Counsel for the Appellant submitted that, even the reply filed by

Respondent No. 1 before the Ld. Adjudicating Authority does not disclose that

Respondent No. 1 ever filed any claim before Respondent No. 2, the

Resolution Professional, in respect of the amounts allegedly payable under

the order dated 06.04.2021 passed under Section 7A of the EPF Act. It was

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -15-

pointed out that at Paragraph 16 of the said reply, Respondent No. 1 merely

stated that the establishment had been informed that dues were not paid as

per the said order, without asserting that any such claim was lodged during

the CIRP.

16. The Ld. Counsel further submitted that since the alleged dues forming

the subject matter of the notice dated 29.04.2022 and summons dated

18.05.2022 do not form part of the approved Resolution Plan, and no claim

in respect thereof was submitted during the CIRP, the said demands stand

extinguished in law, in accordance with the judgment of the Hon'ble Supreme

Court in Ghanashyam Mishra (supra) wherein it has been categorically held

that all claims not included in the Resolution Plan stand extinguished upon

its approval. The said legal position has been reiterated by the Hon'ble

Supreme Court in 'Electrosteel Steel Limited v. Ispat Carrier Private Limited

[(2025) 7 SCC 773]'.

17. Ld. Counsel for the Appellant submits that, in any event, the order

dated 06.04.2021 was passed by Respondent No. 1 pursuant to assessment

proceedings conducted after the moratorium had already commenced upon

the admission of the insolvency petition on 04.07.2019. It is submitted that

the amount so assessed as payable by the Appellant was thereafter sought

to be recovered through notice dated 29.04.2022 and summons dated

18.05.2022 issued by Respondent No. 1. He places further reliance on the

judgment of this Appellate Tribunal in 'CA Pankaj Shah v. Employees'

Provident Fund Organisation and Another, [2025 SCC OnLine NCLAT 1403]',

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -16-

wherein it has been categorically held that no claim can be pressed or

enforced on the basis of an assessment carried out during the period when

the moratorium under Section 14(1) of the IBC was in force, and that such

claims are legally unenforceable.

18. Ld. Counsel further submits that, as regards the direction of the Ld.

Adjudicating Authority requiring the Appellant to approach the Central Board

of Trustees, Employees' Provident Fund, for waiver of damages imposed by

Respondent No. 1, the Appellant relied upon the judgment of this Hon'ble

Tribunal in Manish Kumar Bhagat (supra). In the said case, this Hon'ble

Appellate Tribunal held that damages imposed under Section 14 B vide order

passed when moratorium was in effect, were not to be paid. Its only for

damages imposed vide order passed prior to imposition of moratorium' the

SRA had been directed to pray to the Central Board of Trustees, Employees

Provident Fund' for waiver of the same. It is his submission that in this case

order imposing damages was passed during the moratorium period and in

accordance with the Manish Kumar Bhagat Judgment (supra) such damages

need not to be paid by the SRA.

19. Summing up his arguments, Ld. Counsel submitted that the Impugned

Order suffers from legal infirmities as detailed above, thereby necessitating

interference by this Hon'ble Tribunal.

Submissions of the Respondent No. 1

20. Ld. Counsel for EPFO submitted that the Appellant had filed I.A. No.

1745/2022 seeking four specific reliefs. The Hon'ble NCLT, however, rejected

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -17-

three of the prayers in their entirety and partially allowed only one, namely

the direction restraining the EPFO from taking coercive steps for recovery of

dues from the Successful Resolution Applicant (SRA), subject to the

Appellant filing an application before the Central Board of Trustees,

Employees Provident Fund, within 30 days of the Impugned Order. Despite

the said liberty and recommendation of the Hon'ble NCLT, the Appellant

failed to file an application seeking waiver of damages.

21. Ld. Counsel for Respondent No. 1 further submitted that, as regards

the remaining prayers pertaining to quashing of the notice dated 29.04.2022

and summons dated 18.05.2022, the Hon'ble Adjudicating Authority rightly

rejected the same on the ground that it has no jurisdiction to quash or set

aside notices or summons issued under the EPF & MP Act, 1952. It is

submitted that the EPF Act is a beneficial social security legislation enacted

to safeguard the interests of workmen, and any interpretation contrary to the

settled legal position regarding the priority of provident fund dues would

frustrate the statutory mandate of securing employees' entitlements,

including interest accrued thereon.

22. Ld. Counsel for the Respondent submitted that the Hon'ble NCLT has

correctly held that the only remedy available to the Appellant, if aggrieved by

an order passed under Section 7-A of the EPF & MP Act, 1952, was to

approach the Hon'ble CGIT, which is the competent statutory forum. The

NCLT cannot act as an appellate authority over orders passed under Section

7-A of the EPF & MP Act.

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -18-

23. Ld. Counsel further submitted that the Hon'ble NCLT lacked

jurisdiction to adjudicate upon EPFO dues, as the EPF Act is a special

legislation and the CGIT is specifically constituted for adjudication of

disputes arising thereunder. Proceedings under Section 14-B are quasi-

judicial in nature, and any aggrieved party has a statutory appeal under

Section 71 of the Act.

24. It was further submitted that the Respondent, being the Appellant in

Cross Appeal No. 141/2025, has challenged the recommendation of the

Hon'ble NCLT whereby the Appellant was permitted to seek waiver of

damages, interest, and PF dues by filing an application before the Central

Board of Trustees within one month. However, it is pointed out that no such

application has been filed by the Appellant till date.

25. The Respondent submitted that the Appellant cannot seek waiver of

statutory liabilities, as Section 11(2) of the EPF & MP Act contains a non-

obstante clause giving provident fund dues first charge over the assets of the

establishment, notwithstanding anything inconsistent contained in any other

law. PF dues represent contributions of the employees and contributions due

from the employer, both of which must be paid in priority over all other debts.

Damages levied under Section 14-B operate as a statutory penalty to

compensate for loss of interest caused by delayed payment of PF

contributions.

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -19-

26. Ld. Counsel submitted that the Supreme Court and several High

Courts have consistently held that employees' dues are to be treated with

highest priority. Reliance was placed on the following judgments:

a. EPF Commissioner v. O.L. of Esskay Pharmaceuticals Ltd.

(CA No. 9630/2011)

b. Special Civil Application No. 19075 of 2007, Hon'ble Gujarat

High Court

c. SM Holding Finance Pvt. Ltd. v. Mysore Machinery

Manufacturers Ltd., Karnataka High Court

d. SBI v. Moser Baer Karmachari Union, NCLT, New Delhi

e. Alchemist ARC v. Moser Baer India Ltd., NCLT, Delhi

Principal Bench

f. Precision Fasteners Ltd. v. EPFO, Thane [MA 576 &

752/2018]

g. Hindustan Times v. Union of India (1998)

h. Organo Chemical Industries v. Union of India, AIR 1979 SC 1803

27. The Respondent further relied on the decision of the NCLAT in 'Regional

Provident Fund Commissioner-I, Ahmedabad v. Ramchandra D. Choudhary

[Comp. App. (AT) (Ins.) No. 1001 of 2019], wherein it was held that provident

fund dues do not form part of the assets of the Corporate Debtor under

Section 36(4)(a)(iii) of the IBC. Consequently, Section 238 of the IBC has no

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -20-

application, and PF dues--including interest--must be released in full. The

said judgment has been affirmed by the Hon'ble Supreme Court.

28. Ld. counsel further submitted that damages and penalties under

Section 14-B are assessed only after the principal amount dues are paid.

Hence, the Appellant's contention that such damages were conveyed post-

approval of the Resolution Plan is misconceived.

29. Learned Counsel submitted that Section 11(2) of the EPF Act expressly

provides that all amounts due from an employer, whether towards employees'

contributions or the employer's contributions, shall constitute a first charge

on the assets of the establishment, notwithstanding anything contained in

any other law. It was contended that, accordingly, provident fund dues,

together with interest under Section 7Q and damages under Section 14B of

the EPF Act, enjoy statutory priority and cannot be diluted, waived, or

extinguished through a resolution plan approved under the Insolvency and

Bankruptcy Code, 2016 ("IBC").

30. He stated that Sections 18 and 36(4)(a)(iii) of the IBC expressly exclude

provident fund and gratuity fund dues from the assets of the Corporate

Debtor. It was contended that such amounts do not form part of the

insolvency estate and, therefore, Section 238 of the IBC has no application to

provident fund and gratuity fund dues.

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -21-

31. It was submitted by Ld. Counsel that the mere act of quantifying or

assessing provident fund dues during the period of moratorium does not

violate or contravene Section 14 of the Insolvency and Bankruptcy Code,

2016. It was submitted that such quantification does not amount to a

proceeding "against" the Corporate Debtor, but is only an exercise to

determine the exact amounts held by the Corporate Debtor in trust for its

employees.

32. Ld. Counsel submitted that Sections 18 and 36 of the IBC require

exclusion of provident fund dues from the insolvency estate, and therefore

the moratorium under Section 14 cannot prevent the EPF authorities from

performing their statutory functions under the EPF Act; any interpretation to

the contrary would create an impermissible conflict within the IBC itself.

33. The Ld. Counsel further submitted that the liability arising under

Sections 7Q and 14B of the EPF Act is statutory and compensatory in nature,

and not penal. It was contended that neither the Resolution Professional nor

the NCLT/NCLAT has the jurisdiction to grant or presume any waiver of such

statutory dues. The direction permitting the Appellant to approach the

Central Board of Trustees for waiver does not itself amount to a waiver, and

the failure to file such an application cannot result in extinguishment of the

EPFO's statutory rights.

34. It was submitted that the EPF Act is a self-contained code. Section 7A

thereof empowers the Provident Fund Commissioner to determine provident

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -22-

fund dues, and Section 7I provides a specific statutory appellate remedy

before the Central Government Industrial Tribunal (CGIT). It was contended

that neither the Hon'ble NCLT nor the Hon'ble NCLAT exercises any appellate

or supervisory jurisdiction over statutory orders passed under the EPF Act.

Consequently, any challenge to notices, summons, or assessment orders

issued under the EPF Act lies exclusively before the competent authority

under the said statute and cannot be adjudicated within the insolvency

framework.

35. He submitted that although the Appellant has placed reliance on the

judgment of the Hon'ble NCLAT in EPFO v. Jaykumar Pesumal Arlani,

reported as 2025 SCC OnLine NCLAT 9, the said judgment has been

challenged by the EPFO before the Hon'ble Supreme Court and the matter is

presently pending for hearing on 25.11.2025.

36. Summing up his arguments, Ld. Counsel submitted that, having

regard to the facts and the settled legal position, the present appeal filed by

the Appellant is liable to be dismissed, while the Cross Appeal of the

Respondent merits allowance to the extent of directing that EPFO dues,

including interest and damages, be accorded statutory priority and be paid

by the SRA.

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -23-

Analysis and Findings

37. We have heard the Ld. Counsels for both sides in great detail and gone

through the records of the case including the written submissions filed by

the parties.

38. The key question to be answered in this appeal is whether any

proceeding under EPFO Act could be undertaken by the EPF Authorities

during the period of moratorium in CIRP proceedings under Section 14 of the

Code? and if so, what would be the impact of such orders passed during the

moratorium.

39. It is the submission of the Appellant that after the initiation of the CIRP

against the Corporate Debtor by order dated 04.07.2019, no determination

could have been made by the EPFO, nor could any claim be raised on the

basis of such post-CIRP determination. After the initiation of CIRP on

04.07.2019 the EPFO initially filed its claim in Form B dated 24.09.2019,

claiming an amount of Rs. 17.90 lakhs, which was duly reflected in the

Information Memorandum prepared by the Resolution Professional.

Resolution Professional in his submission before 5th CoC stated that EPFO

has filed a revised claim (including Interest upto CIRP commencement date)

of Rs. 63.15 lakhs, the same had been admitted in full by the RP and the

Resolution Applicant has agreed to pay the entire amount. The said claim

was considered during the CIRP, and the Resolution Plan ultimately approved

by the Adjudicating Authority on 09.11.2021 provided for Rs. 63.15 lakhs

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -24-

towards PF liabilities as full and final settlement, which amount was paid by

the SRA on 25.03.2022. Subsequent thereto, the EPFO issued notices,

summons and passed orders under Sections 7A, 7Q and 14B, raising

additional demands beyond the claim admitted during CIRP and beyond the

amounts provided under the approved Resolution Plan, which form the

subject matter of challenge in the present proceedings.

40. It is further submitted that upon receipt of the additional demands

raised by Respondent No. 1, the Appellant approached Respondent No. 2

seeking clarification with regard to the additional liability sought to be

fastened upon it. Respondent No. 2, vide his letter dated 13.05.2022, gave

the full chronology of the claim and stated that no further amount was

payable to EPFO, which had not been mentioned earlier at any stage of the

CIRP, in accordance with provisions of the Code and judicial precedents.

The Appellant, thereafter, vide its letter dated 17.05.2022, denied its liability

to pay the additional amounts claimed by Respondent No. 1. Thereafter,

Respondent No. 1 issued summons dated 18.05.2022, claiming fresh dues

amounting to Rs. 62,09,154/- for the period from 01.04.2015 to

30.06.2019, the demand for which was raised subsequent to the order dated

09.11.2021 passed by the Adjudicating Authority approving the Resolution

Plan.

41. The RP's reply dated 13.05.2022 to the appellant captures the

substance of the entire issue in detail, the same is extracted below:

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -25-

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -26-

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -27-

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -28-

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -29-

42. The RP's reply brings out the following:

i. The CIRP of the Goa Invest Cast Ltd. was initiated on 04.07.2019. The

IRP invited claims from the Creditors on 10.07.2019 with last date for

submission of claims as 22.07.2019.

ii. Assistant PF Commissioner EPFO Regional office Goa submitted his

claim of Rs. 17,90,268/- to the IRP on 24.09.2019, nearly 2 month

after the last date of submission of such claims. The claim was

admitted in full by the RP.

iii. Subsequently, the workmen and employees of Goa Invest Cast Ltd.

submitted their claims of PF dues through their union/ association

which was as follows:

S. N. Category Amount 1. Workmen Rs. 47.45 lakhs 2. Employees Rs. 15.58 lakhs Total Rs. 63.15 lakhs

The above claim filed by workmen and employees was admitted in full by the RP and the claim was also included in the list of creditors.

iv. Subsequent to filing of claim by workmen and employees, EPFO Goa

filed a revised claim of Rs. 52,14,739/- in Form-B dated 16.01.2020.

v. As the claim submitted by the workmen and employees was higher

than the claim of EPFO, the RP processed the higher claim of Rs. 63.15

lakhs, which was approved by the CoC as well as the Adjudicating

Authority.

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -30-

vi. RP further quoted the provisions of Section 31 (1) of the Code which

provides that the resolution plan as approved by the Adjudicating

Authority is binding on all including the Central Government. RP also

cited the Judgments of Hon'ble Supreme Court in 'Ghanshyam Mishra

and Sons Private Limited vs. Edelweiss Asset Reconstruction Company

Limited through the Director and Others', [(2021) 9 SCC 657], and the

Judgment of this Appellate Tribunal in the matter of 'Regional

Provident Fund Commissioner Vs. Vandana Garg [Company Appeal (AT)

(CH) (Ins.) No. 50 of 2021]'.

43. The Section 14 of the Code provides for moratorium during the CIRP

proceedings and its impact on CD and other stakeholders. The sub section

relevant to new or ongoing proceedings is Section 14 (1) (a) which is extracted

below:

"Section 14: Moratorium.

*14. (1) Subject to provisions of sub-sections (2) and (3), on the

insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely:--

(a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority;"

44. It can be seen from the above that the moratorium encompasses a very

sweeping definition and bars both initiation and continuation of any pending

suit or proceedings against the CD. The proceeding may be before any court

of law, Tribunal, Arbitration Penal or other authority. The proceedings before

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -31-

EPFO would fall in the category of "proceedings before other authority". The

language of the Section 14 (1) (a) therefore clearly indicates a bar against

initiation of proceeding by the EPFO Authorities during the moratorium

period.

45. This Appellate Tribunal had examined the effect of Moratorium on

EPFO proceedings in 'Employees Provident Fund vs. Jaykumar Pesumal

Arlani [Comp. App. (AT) (Ins.) No. 1062 of 2024]'. The relevant paras 9 to 13

are extracted below:

"9. From the submissions of learned Counsel for the parties,

following issues arise for consideration:

(1) Whether after imposition of moratorium under Section 14 of the

IBC, assessment proceedings can be carried on by the EPFO under

Section 7A, 14B and 7Q of the EPF & MP Act, 1952.

(2) Whether any claim on the basis of assessment, subsequent to

imposition of moratorium, can be admitted in the CIRP.

(3) Whether claims, which were filed by the Appellant(s), subsequent

to the approval of Resolution Plan by the CoC, could have been

admitted in the CIRP.

Question Nos. (1) & (2)

Question Nos.(1) & (2) being interrelated, are being taken together.

10. In Company Appeal (AT) (Ins.) No.1062 of 2024, CIRP was

initiated vide order dated 03.05.2021 and the assessment order

under Section 7A was passed on 11.08.2023 and order under

Section 14B and 7Q was issued on 16.08.2023. In Company Appeal

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -32-

(AT) (Ins.) No.1065 of 2024, the CIRP against the CD commenced on

12.07.2021 and assessment order under Section 7A was passed on

29.08.2022. It is an admitted position that in both the cases,

assessment orders under Section 7A, 14B and 7Q were passed

subsequent to initiation of CIRP against the CD. Moratorium under

Section 14 was imposed by the Adjudicating Authority, initiation

CIRP. Section 14(1) of the IBC provides as follows:

"14. Moratorium. -

(1) Subject to provisions of sub-sections (2) and (3), on the

insolvency commencement date, the Adjudicating Authority shall

by order declare moratorium for prohibiting all of the following,

namely:-

(a) the institution of suits or continuation of pending suits or

proceedings against the corporate debtor including

execution of any judgement, decree or order in any court of law,

tribunal, arbitration panel or other authority;

(b)transferring, encumbering, alienating or disposing off by the

corporate debtor any of its assets or any legal right or beneficial

interest therein;

(c) any action to foreclose, recover or enforce any security interest

created by the corporate debtor in respect of its property including

any action under the Securitisation and Reconstruction of

Financial Assets and Enforcement of Security Interest Act, 2002

(54 of 2002);

(d) the recovery of any property by an owner or lessor where such

property is occupied by or in the possession of the corporate

debtor.

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -33-

Explanation.-For the purposes of this sub-section, it is hereby

clarified that notwithstanding anything contained in any other

law for the time being in force, a licence, permit, registration,

quota, concession, clearance or a similar grant or right given by

the Central Government, State Government, local authority,

sectoral regulator or any other authority constituted under any

other law for the time being in force, shall not be suspended or

terminated on the grounds of insolvency, subject to the condition

that there is no default in payment of current dues arising for the

use or continuation of the license or a similar grant or right

during moratorium period."

11. The Hon'ble Supreme Court had occasion to consider effect and

consequence of imposition of moratorium. The Hon'ble Supreme

Court in (2020) 13 SCC 208 - Rejendra K. Bhutta vs. Maharashtra

Housing and Area Development and Anr. held that after the

imposition of moratorium, a statutory freeze takes place. In

paragraph 25 of the judgment, following was held:

"25. There is no doubt whatsoever that important functions

relating to repairs and reconstruction of dilapidated buildings

are given to MHADA. Equally, there is no doubt that in a given

set of circumstances, the Board may, on such terms and

conditions as may be agreed upon, and with the previous

approval of the Authority, hand over execution of any housing

scheme under its own supervision. However, when it comes to

any clash between MHADA Act and the Insolvency Code, on the

plain terms of Section 238 of the Insolvency Code, the Code must

prevail. This is for the very good reason that when a moratorium

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -34-

is spoken of by Section 14 of the Code, the idea is that, to

alleviate corporate sickness, a statutory status quo is

pronounced under Section 14 the moment a petition is admitted

under Section 7 of the Code, so that the insolvency resolution

process may proceed unhindered by any of the obstacles that

would otherwise be caused and that are dealt with by Section

14. The statutory freeze that has thus been made is, unlike its

predecessor in the SICA, 1985 only a limited one, which is

expressly limited by Section 31(3) of the Code, to the date of

admission of an insolvency petition up to the date that the

adjudicating authority either allows a resolution plan to come

into effect or states that the corporate debtor must go into the

liquidation. For this temporary period, at least, all the things

referred to under Section 14 must be strictly observed so that

the corporate debtor may finally be put back on its feet albeit

with a new management."

12. In (2021) 6 SCC 258 - P. Mohanraj and Ors. Vs. Shah Brothers

ISPAT Pvt. Ltd., the Hon'ble Supreme Court had occasion to interpret

the expression "proceeding" in Section 14. The object and purpose of

moratorium has been captured in paragraph 30 of the judgment,

which is as follows:

"30. It can be seen that Para 8.11 refers to the very judgment

under appeal before us, and cannot therefore be said to throw

any light on the correct position in law which has only to be

finally settled by this Court. However, Para 8.2 is important in

that the object of a moratorium provision such as Section 14 is

to see that there is no depletion of a corporate debtor's assets

during the insolvency resolution process so that it can be kept

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -35-

running as a going concern during this time, thus maximising

value for all stakeholders. The idea is that it facilitates the

continued operation of the business of the corporate debtor to

allow it breathing space to organise its affairs so that a new

management may ultimately take over and bring the corporate

debtor out of financial sickness, thus benefitting all

stakeholders, which would include workmen of the corporate

debtor. Also, the judgment of this Court in Swiss Ribbons (P) Ltd.

v. Union of India [Swiss Ribbons (P) Ltd. v. Union of India, (2019)

4 SCC 17] states the raison d'être for Section 14 in para 28 as

follows : (SCC p. 55)

"28. It can thus be seen that the primary focus of the legislation is to ensure revival and continuation of the corporate debtor by protecting the corporate debtor from its own management and from a corporate death by liquidation. The Code is thus a beneficial legislation which puts the corporate debtor back on its feet, not being a mere recovery legislation for creditors. The interests of the corporate debtor have, therefore, been bifurcated and separated from that of its promoters/those who are in management. Thus, the resolution process is not adversarial to the corporate debtor but, in fact, protective of its interests. The moratorium imposed by Section 14 is in the interest of the corporate debtor itself, thereby preserving the assets of the corporate debtor during the resolution process. The timelines within which the resolution process is to take place again protect the corporate debtor's assets from further dilution, and also protects all its creditors and workers by seeing that the resolution process goes through as fast as possible so that another management can, through its entrepreneurial skills, resuscitate the corporate debtor to achieve all these ends."

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -36-

13. The plain reading of Section 14, sub-section (1) indicates that

expression 'suits or proceedings against the corporate debtor' has

been used. The word 'proceeding' is not qualified, so as to confine it

to proceedings before the Civil Court. The proceedings, which have

the effect on the assets of the CD are all covered in the expression

'proceeding'. The question to be answered is as to whether after

moratorium has been imposed, it was open for EPFO to proceed with

the assessment proceeding. Learned Counsel for the parties state

that during moratorium proceeding, no recovery proceeding can be

initiated against the CD. However, submissions of the learned

Counsel for the Appellant is that assessment proceedings against

the CD may continue. Hence, the orders of assessment passed

during moratorium period, were fully permissible and the claim on

the basis of the said proceedings had to be admitted in CIRP."

46. The operative portion of the Judgment in Pesumal Arlani (supra) is

given in para 24 of the Judgment which is extracted below:

"24. In view of the aforesaid, we answer Question Nos.(1) and (2) in

following manner:

(1) We hold 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, sub-

section(5), does not prohibit initiation or continuation of assessment

proceedings.

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -37-

(2) No claim on the basis of assessment carried during the

moratorium period, which is prohibited under Section 14(1) can be

pressed in the CIRP."

47. The Judgment in Pesumal Arlani (supra) has also discussed the

Judgment of Hon'ble Supreme Court relied upon by the Respondent in

'Sundresh Bhatt, Liquidator of ABG Shipyard vs. Central Board of Indirect

Taxes and Customs [(2023) 1 SCC 472]'. The findings of the Appellate

Tribunal in para 18 of the Judgment are extracted below:

"18. The Hon'ble Supreme Court in paragraph 42 held that

demand notice to seek enforcement of the customs dues during the

moratorium period, clearly violate the provisions of Section 14 or

33(5) of the IBC. In paragraph 42, following was held:

"42. We are of the clear opinion that the demand notices to

seek enforcement of custom dues during the moratorium

period would clearly violate the provisions of Sections 14 or

33(5) of the IBC, as the case may be. This is because the

demand notices are an initiation of legal proceedings

against the Corporate Debtor. However, the above analysis

would not be complete unless this Court examines the extent

of powers which the Respondent authority can exercise

during the moratorium period under the IBC."

48. This Appellate Tribunal in "CA Pankaj Shah Vs Employee Provident

Fund Organisation and Another [Comp. App. (AT) (Ins.) No. 17 of 2025]",

reiterated the decision of the Pesumal Arlani (supra) holding that after

initiation of CIRP, and when the moratorium under Section 14(1) of the IBC

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -38-

was in force, no assessment can be initiated or continued against the

Corporate Debtor or enforced on the basis of an assessment carried out

during the period so as to pass any pecuniary liability on the Corporate

Debtor.

49. It is undisputed that the CIRP of the Corporate Debtor commenced on

04.07.2019, and the moratorium under Section 14 of the Insolvency and

Bankruptcy Code, 2016 continued till the approval of the Resolution Plan on

09.11.2021. The demand made by the EPFO on the basis of the inspection

and assessment culminating in the order dated 06.04.2021, as well as the

summons dated 18.05.2022, is clearly a demand sought to be enforced after

commencement of the CIRP and during the subsistence of moratorium. The

assessment proceedings under Sections 7A, 7Q and 14B, which formed the

basis of the subsequent demands, were initiated and culminated during the

moratorium period, and the consequential demands were sought to be raised

after approval of the Resolution Plan. The revised claim raised vide summons

dated 18.05.2022, claiming an amount of Rs. 62,09,154/-, was thus founded

entirely on proceedings and determinations undertaken post commencement

of CIRP, and in respect of which no claim was ever filed during the CIRP.

Such determinations of EPFO claims and subsequent demand of Rs.

62,09,154/- on 06.04.2021, during the subsistence of moratorium period,

which is sought to be enforced against the Successful Resolution Applicant

after approval of the Resolution Plan, are clearly hit by the moratorium and

cannot form the basis of any enforceable claim against the SRA.

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -39-

50. The Appellant placed reliance on the judgment of the Hon'ble Supreme

Court in Ghanshyam Mishra (supra) and Electrosteel Steel Limited Vs Ispat

Carrier Private Limited', cited as (2025) 7 SCC 773. In the above cases the

Hon'ble Supreme Court reiterated that once a resolution plan is duly

approved by the Adjudicating Authority under Section 31(1) of the IBC, it

becomes binding on the corporate debtor and all its stakeholders, including

creditors, central and state governments, guarantors, and other

stakeholders. All claims that are not a part of the approved resolution plan

stand extinguished, and no person can initiate or continue any proceeding in

respect of such claims.

51. The Respondent on the other hand has cited several Judgment of

Hon'ble Supreme Court and Hon'ble High Court, but none of these cases

relate to inter play between EPF and MP Act, 1952 and the IBC. The main

Judgment relied by the respondents is the decision of this Appellate Tribunal

in Regional Provident Fund Commissioner -1 Ahmedabad vs. Ramchandra

D. Choudhary (supra). However, we note that the aforesaid Judgment refers

to the claims of the EPFO finalized during the liquidation of the company.

Respondent has submitted that under Section 36 (4) (iii) of the Code the

'Provident Fund' and the 'Gratuity Fund' are not the assets of Corporate

Debtor and therefore this Appellate Tribunal held that there is no conflict

between Section 238 of I&B Code and the provisions of the EPF and MP Act,

1952. The Judgment was further upheld by the Hon'ble Supreme Court.

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -40-

52. The ratio of the above Judgment in liquidation proceedings holds true

as the moratorium under the liquidation proceedings does not bar initiation

of proceedings. However, as we have seen in the Judgments of Hon'ble

Supreme Court in P.Mohanraj (Supra) that the proceedings under Section 14

(1)(a) of the Code have a very wide and expansive scope and covers every type

of proceedings including those by statutory authorities.

53. We note that the judgment of this Appellate Tribunal in "CA Pankaj

Shah (supra) reiterated the decision of this Tribunal in Pesumal Arlani (supra)

holding clearly that after initiation of the CIRP, no assessment proceedings

can be initiated or continued against the Corporate Debtor so as to fasten

any pecuniary liability upon it. In the present case, it is undisputed that the

CIRP of the Corporate Debtor commenced on 04.07.2019, and the

moratorium under Section 14 of the Code remained in force till 09.11.2021,

when the Resolution Plan came to be approved. Notwithstanding the

subsistence of the moratorium and the subsequent approval of the

Resolution Plan, the EPFO raised demands on the basis of assessment

proceeding which culminated in the order dated 06.04.2021. Thereafter

EPFO issued a notice dated 29.04.2022 and summons dated 18.05.2022, to

the Corporate Debtor, claiming fresh dues amounting to Rs. 62,09,154/-

were to be paid by the CD. The said demands were founded upon proceedings

and determinations undertaken during the moratorium period, and no claim

in respect thereof was ever filed during the CIRP. When no demand could be

made on the basis of any inspection or assessment carried out during the

moratorium, we find no ground to sustain the claim sought to be enforced by

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025 -41-

the EPFO through its post-CIRP notices and summons, nor do we find any

merit in the cross appeal filed by the EPFO seeking priority treatment of such

claims.

54. In view of the findings, that no assessment proceedings can be

continued by the EPFO after the initiation of moratorium under section 14(1)

of the Code and further no claim on the basis of assessment carried out

during the moratorium period can be pressed by the EPFO, the Appeal filed

by the Successful Resolution Applicant, being Company Appeal (AT)

(Insolvency) No. 2319 of 2024, to the extent of prayer (a) of the appeal is

allowed. The linked appeal filed by the Employees' Provident Fund

Organisation, being Company Appeal (AT) (Insolvency) No. 141 of 2024, is

dismissed. All pending Interlocutory Applications, if any, stand disposed of.

The parties shall bear their own costs.

[Justice Mohd. Faiz Alam Khan] Member (Judicial)

[Mr. Indevar Pandey] Member (Technical)

SA/Prince (LRA)

Company Appeal (AT) (Ins.) Nos. 2319 of 2024 & 141 of 2025