2021 (12) TMI 1372 - Tri - Insolvency and Bankruptcy

Seeking direction to Resolution Professional to make provision in the information memorandum and corresponding resolution plan - HELD THAT - The EPFO Department has not followed the due process as prescribed under the IBC, 2016. The Supreme Court in the matter of PK. RAMACHANDRAN VERSUS STATE OF KERALA ANR. 1997 (9) TMI 598 - SUPREME COURT has held that an essential pre requisite of exercising discretion to condone the delay is that the Court must record its satisfaction that the explanation of delay was either reasonable or satisfactory. Further, in the present case the Applicant is not even aware whether the Company is under Liquidation or under the CIRP. In any case, the insurmountable delay of nearly 936 days cannot be condoned at this belated stage. Application dismissed.

Summary

Issues:
1. Claim for payment of EPF dues by the Applicant against the Corporate Debtor.
2. Timeliness of filing the claim by the Applicant during the liquidation process.
3. Comparison with a previous NCLAT judgment regarding condonation of delay.
4. Evaluation of due process under the IBC, 2016 for filing claims during liquidation.

Analysis:
1. The Applicant, a statutory organization representing EPFO, filed a claim seeking payment of Rs. 3,09,88,511/- for EPF dues against the Corporate Debtor, who failed to remit employee contributions for the period 05/2015 to 11/2018.
2. The Tribunal noted that the claim was filed belatedly on 03.02.2021, 936 days after the stipulated deadline of 14.07.2018 during the liquidation process, raising concerns about diligence in adhering to timelines.
3. Referring to a previous NCLAT judgment, the Tribunal highlighted the importance of adhering to prescribed timelines during liquidation, emphasizing the time-bound nature of the process and the need for sufficient cause to condone delays.
4. The Tribunal observed that the EPFO Department did not follow due process as per the IBC, 2016, and failed to provide a reasonable explanation for the significant delay in filing the claim, which was further complicated by uncertainty regarding the Corporate Debtor's status.
5. Citing a Supreme Court precedent, the Tribunal emphasized the necessity of a reasonable or satisfactory explanation for delay condonation, concluding that the substantial delay of 936 days could not be justified at such a late stage.
6. Consequently, the Tribunal dismissed IA/442/2021, highlighting the importance of timeliness in filing claims during liquidation proceedings and the need for adherence to prescribed processes under the IBC, 2016.