2023 (8) TMI 194 - AT - Insolvency and Bankruptcy

Rejection of the Claim by the Liquidator - challenge to the rejection dismissed on the grounds that the Appellant did not file any Order passed under the EPF MP Act, 1952 and that no supporting documents have been enclosed in that regard - HELD THAT - It is seen from the record that the Corporate Debtor has declared the Contribution amount in the monthly returns, but while remitting the amounts admittedly he has permitted amounts short of the already declared contribution and the same is reflected in the Establishment Ledger. The Employees Provident Fund Scheme, 1952 requires the Employer / Corporate Debtor to prepare a Contribution Card which would deal all the payments made by the Corporate Debtor against the monthly PF dues payable by the Corporate Debtor and the shortcomings in the remittance of the said dues would be automatically reflected in the Establishment Ledger. The contention of the Learned Counsel appearing for the Liquidator that an Assessment Order is an essential prerequisite for realising the amounts, is untenable in the light of the aforenoted discussion. This Tribunal is of the considered view that the ratio of the NCLAT, Principal Bench in the matter of JET AIRCRAFT MAINTENANCE ENGINEERS WELFARE ASSOCIATION VERSUS ASHISH CHHAWCHHARIA RESOLUTION PROFESSIONAL OF JET AIRWAYS (INDIA) LTD. ORS; ASSOCIATION OF AGGRIEVED WORKMEN OF JET AIRWAYS (INDIA) LTD. VERSUS JET AIRWAYS (INDIA) LTD. ORS. 2022 (11) TMI 332 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI upheld by the Hon ble Apex Court in JALAN FRITSCH CONSORTIUM VERSUS REGIONAL PROVIDENT FUND COMMISSIONER ANR. 2023 (3) TMI 223 - SUPREME COURT , with respect to the full payment of the Provident Fund dues, is squarely applicable to the facts of this case. The Order of the Adjudicating Authority is set aside and the Liquidator is permitted to admit the Claims based on the Establishment Ledger - appeal allowed.

Summary

Issues involved:
The judgment addresses the challenge to the rejection of a claim by the liquidator based on non-submission of certain documents and the grounds for rejecting the claim.

Summary:

Issue 1: Challenge to Rejection of Claim
The appeal arose from the rejection of a claim by the liquidator due to non-submission of an order under the EPF & MP Act, 1952 and lack of supporting documents. The appellant had filed a claim for admission, but it was rejected for these reasons by the Adjudicating Authority.

Issue 2: Submission of Claim and Rejection
The Corporate Debtor, M/s Abra Motors Private Limited, was admitted into CIRP and subsequently ordered for liquidation. The appellant filed a claim for Rs. 26,16,268, which was acknowledged by the liquidator. Despite providing details of short remittances and establishment ledgers, the claim was rejected for not providing an Assessment Order and failing to reply to emails requesting additional documents.

Issue 3: Dispute over Claim Rejection
The appellant argued that no Assessment Order was necessary as the claimed dues were based on defaults by the Corporate Debtor, which were already admitted in monthly returns. The establishment ledger detailed the short remittances, and the appellant contended that no further inquiry was required under the EPF & MP Act, 1952.

Issue 4: Legal Interpretation and Precedents
The Tribunal analyzed the provisions of the Employees Provident Fund Scheme, 1952, regarding the preparation of contribution cards by the employer. It was noted that Sections 7A(a) and (b) of the Act are applicable only in cases of disputes, which were not present in this instance. The Tribunal also referred to a previous NCLAT decision and a Supreme Court ruling regarding full payment of Provident Fund dues, which supported the appellant's case.

Conclusion:
The Company Appeal was allowed, setting aside the Adjudicating Authority's order. The liquidator was directed to admit the claims based on the establishment ledger, in accordance with the provisions of the Employees Provident Fund Scheme, 1952. No costs were awarded, and any pending interlocutory applications were closed.