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TMI Blog2021 (5) TMI 444X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Appellant's claim admitted by Respondent No. 1/RP had been considered while formulating the Resolution Plan of the Corporate Debtor. The said Resolution Plan was further approved by the Adjudicating Authority/NCLT vide its Order dated July 20 2020, in conformity with Section 30 (2) of the I B Code,2016 and the Rules and Regulations framed thereunder. The Appellant has not provided any reason or justification for raising the enhanced claim of ₹ 2,84,69,797/-, which is much higher than the amount claimed. After approval of the Resolution Plan under Section 31, the claims as provided in the Resolution Plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors including the Central Government, any State Government or any Local Authority, Guarantors and other Stakeholders. On the approval of the Resolution Plan by the Adjudicating Authority, all such claims that are not a part of the Resolution Plan shall stand extinguished. No person will be entitled to initiate continuing any proceedings regarding a claim that is not part of the Resolution Plan. The Appellants claim about Provident Fund dues amounting to ₹ 1,95,01 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant has raised the additional claim, despite having full knowledge of the CIRP and having calculated its dues, which were admitted, cannot now enhance the same and seek more. The debts of the Corporate Debtor stood crystallised as on the date of initiation of CIRP. 13. Furthermore, there is no occasion for referring to the provisions of Section 36 (4) (a) (ii) of the Insolvency and Bankruptcy Code 2016 in the present matter since it would only arise upon the formation of the Liquidation Estate by the Liquidator in terms of the Code. The Corporate Debtor has not gone into Liquidation in the present matter and is currently under a Resolution Plan. 14. Furthermore, no separate corpus was maintained for the Provident Fund by the Corporate Debtor in the present case. Therefore, in the absence of any such funds of any recurring cash flows with the Corporate Debtor, Respondent No. 1/RP is not in a position to now make provision for the payment of Provident Fund dues. Therefore, no fund could be excluded from the Liquidation Estate in terms of Section 36 (4) (a) (iii) of the I B Code to be paid to the Appellant, even in Liquidation of the Corporate Debtor. However, in the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Plan which waves off the major portion of the Provident Fund dues owed by the Corporate Debtor. 18. Admittedly the Corporate Debtor GVR Infra Projects Limited has defaulted in payment of dues/damages/interest, including the employees share of contribution, since 2014, which were deducted from employees' wages. The Appellant now claims overall dues towards the Provident Fund to the tune of ₹ 2,84,69,747/-,. In contrast, Appellant's Provident Fund claim amounting to ₹ 1,95,01,301/- had already been admitted and dealt with in the Resolution Plan. 19. The CIR Process started against the Corporate Debtor on October 15, 2018. The Appellant submitted its claim in form 'F' on December 31, 2018. After that, the RP suggested the Appellant for filing its claim in Form 'B'. In response to that, the Appellant submitted its claim in form B . Thereafter, the Resolution Professional informed the Appellant about approval of the Resolution Plan by the Adjudicating Authority. 20. The Appellants claim that Section 11 of the EPF Act contains a non-obstante clause and lays down that if any amount is due from an employer, whether in respect of employees con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to be paid to the Appellant. Since no separate corpus was created for the Provident Fund, the said provisions are not applicable in the present case. 26. It is necessary to mention that the Hon'ble Supreme Court in the case of The Committee of Creditors of Essar Steel India Ltd versus Satish Kumar Gupta has held; A successful resolution applicant cannot suddenly be faced with undecided claims after the resolution plan submitted by him has been accepted as this would amount to a Hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution applicant who successfully take over the corporate debtor . 27. Further, it is necessary to mention that the question of applicability of Section 36 (4) (a) (iii) of the Insolvency and Bankruptcy Code 2016 arises at the stage of the formation of Liquidation Estate by the Liquidator. Since the Corporate Debtor has not gone into Liquidation and is currently under Insolvency Resolution, Section 36 of the I B Code cannot be applied. Moreover, no fund could be excluded from the Liquidation Estate in terms of Section 36 (4) (a)(iii) of the I B Code 2016. 28. It is pertinent to mention that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laid down under the payment of Gratuity Act, 1972 and also on the availability of the fund in this regard. Based on the judgment of this Appellate Tribunal in case of the State Bank of India Vs. Moser Baer Karamchari Union and Another, 2019 SCC Online NCLAT 447, it is clear that in terms of sub-Section (4)(a)(iii) of Section 36 all sums due to any workman or employees from the Provident Fund, Pension Fund and the Gratuity Fund, do not form part of the liquidation estate/liquidation assets of the 'Corporate Debtor '. Therefore, the question of distribution of Provident Fund or the Pension Fund or the Gratuity Fund in order to priority, and within such period as prescribed under Section 53(1), does not arise. It is further held in the above case that 53(1)(b)(i) of the I B Code, regarding distribution of assets, relating to workmen's dues is confined to a period of 24 months, preceding the liquidation commencement date. This question has already been decided that Gratuity Fund does not form the part of the liquidation asset. Therefore, the question of distribution of the Gratuity Fund in Order of priority, provided under Section 53(1) of the Code does not arise. Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h terms and conditions as may be specified in the Scheme.]] 31. It is thus clear that before coming into force of the Insolvency and Bankruptcy Code 2016 while sanctioning a scheme for rehabilitation of a sick company under Section 4 of the Sick Industrial Companies (Special Provisions) Act, 1985 Central Board constituted under the EPF Act was authorised under Section 14B of the Act to reduce or waive off the damages levied about an establishment which is a sick industrial company. 32. In the instant case, the Appellant, despite filing a claim of ₹ 1,95,01,301/- has raised a claim of ₹ 2,84,69,797/-,i.e. much higher than the amount claimed by the Appellant in its claim before the Resolution Professional. The Appellant's claim admitted by Respondent No. 1/RP had been considered while formulating the Resolution Plan of the Corporate Debtor. The said Resolution Plan was further approved by the Adjudicating Authority/NCLT vide its Order dated July 20 2020, in conformity with Section 30 (2) of the I B Code,2016 and the Rules and Regulations framed thereunder. The Appellant has not provided any reason or justification for raising the enhanced claim of ₹ 2,8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brought out the 2019 amendment so as to cure the said mischief. We therefore hold, that the 2019 amendment is declaratory and clarificatory in nature and therefore retrospective in operation. CONCLUSION 95. In the result, we answer the questions framed by us as under: (i) That once a resolution plan is duly approved by the Adjudicating Authority under subsection (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan; (ii) 2019 amendment to Section 31 of the I B Code is clarificatory and declaratory in nature and therefore will be effective from the date on which I B Code has come into effect; (iii) Consequently all the dues including the statu ..... 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