2019 (2) TMI 602 - Tri - Insolvency and Bankruptcy

Seeking waiver of penal damages - Scheme approved by the BIFR - Held that - When the matter is pending before this Tribunal it was brought to the notice of the Tribunal that request for waiver is pending for consideration. If it is pending, then the Central Provident Fund Commissioner cum Secretary to process it expeditiously and communicate the order if any passed thereon to the Petitioner since order of attachment over the immovable property is pending and also lien is pending in the account. The CPFC to consider the request of the Petitioner. In the light of the Scheme approved by the BIFR and pass suitable order. However, if no application is pending for waiver then intimation be given to the Petitioner to submit fresh application and the same may be considered as expeditiously as possible and communicate the order to be passed thereon. The Petitioner already paid PF dues and also interest thereon. The amount due is with reference to the penal damages as M/s POL, the original company became sick and MRS was approved by BIFR. The CPFC may take appropriate decision and communicate the same. So with these observations, the Petition can be disposed of - (a)The CPFC i.e. Central Provident Fund Commissioner to consider if the Application filed by Petitioner seeking waiver of penal damages basing on the approved MRS which was sanctioned by BIFR, if pending and decide expeditiously. (b)If no Application is pending as contended in the counter, the CPFC is directed to inform the Petitioner of the same and further direct the Petitioner to file fresh Application for waiver for consideration so as to enable the Petitioner to take appropriate decision basing on the order to be passed by Central Provident Fund Commissioner on the Application filed for waiver.

Issues Involved:
1. Waiver of damages and penalties imposed by the Provident Fund Department.
2. Implementation of the Modified Rehabilitation Scheme (MRS-08) approved by BIFR.
3. Attachment of immovable property and bank account by EPFO.
4. Jurisdiction and authority of the Tribunal under IBC, 2016.

Detailed Analysis:

1. Waiver of Damages and Penalties Imposed by the Provident Fund Department:
The Petitioner sought directions for the waiver of penal damages amounting to ?7,52,424/- imposed by the Provident Fund Department. The Tribunal noted that Clause 8.3.2 of the Modified Rehabilitation Scheme (MRS-08) provided for the consideration of waiver of penalties and damages. The Petitioner had approached the Hon'ble High Court earlier, which directed them to apply to the Central Provident Fund Commissioner-cum-Secretary of the Central Board for waiver. The Tribunal observed that the Central Provident Fund Commissioner (CPFC) is the appropriate authority to decide on the waiver and directed CPFC to process the application expeditiously if pending, or inform the Petitioner to file a fresh application if none is pending.

2. Implementation of the Modified Rehabilitation Scheme (MRS-08) Approved by BIFR:
The Tribunal recognized that the MRS-08 approved by BIFR included a comprehensive package of reliefs and concessions, including the merger of Plant Organics Ltd (POL) with SMS Pharmaceuticals Ltd, which later demerged into SMS Life Sciences India Ltd. The Tribunal emphasized that the scheme provided for certain reliefs, including the waiver of penalties and damages by the Provident Fund Department. The Tribunal's role under Section 252 of IBC, 2016, was to address any difficulties in implementing the sanctioned scheme, which is now deemed an approved resolution plan under IBC.

3. Attachment of Immovable Property and Bank Account by EPFO:
The Petitioner challenged the attachment of its immovable property and bank account by EPFO for the recovery of penal damages. The Tribunal noted that the Hon'ble High Court had earlier directed the Petitioner to seek waiver from the CPFC and restrained EPFO from taking coercive steps until the application was decided. The Tribunal directed CPFC to expedite the decision on the waiver application and communicate the outcome to the Petitioner, which would impact the attachment status.

4. Jurisdiction and Authority of the Tribunal under IBC, 2016:
The Tribunal asserted its jurisdiction under Section 252 of IBC, 2016, to address issues arising from the implementation of schemes sanctioned by BIFR, now deemed approved resolution plans under IBC. The Tribunal referred to the Ministry of Home Affairs notification dated 24.05.2017, which clarified that schemes sanctioned under SICA, 1985, would be treated as approved resolution plans under IBC. The Tribunal's authority included monitoring and reviewing the implementation of such schemes.

Conclusion:
The Tribunal disposed of the petition with specific directions:
1. The CPFC was directed to consider the waiver application expeditiously if pending, or inform the Petitioner to file a fresh application if none was pending.
2. The CPFC was instructed to communicate the decision on the waiver application to the Petitioner, considering the approved MRS.
3. The Tribunal emphasized the need for timely resolution to address the attachment of immovable property and bank account, ensuring compliance with the sanctioned scheme and legal provisions.

The petition was thus disposed of, with the Tribunal providing clear directions to ensure the implementation of the reliefs and concessions granted under the Modified Rehabilitation Scheme.

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