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TMI Blog2021 (8) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... ince the Corporate Debtor was dissolved, the company is no more in existence in the eye of law - Appeal dismissed. - Company Appeal (AT) (CH) (INS) No. 10 of 2021 - - - Dated:- 16-8-2021 - [Justice M Venugopal] Member (Judicial) And [Kanthi Narahari] Member (Technical) For the Appellant : Mr. V. Venkadasalam, Advocate For the Liquidator : Mr. Gorur Narasimhamurthy Venkataraman, Advocate JUDGMENT (VIRTUAL MODE) Per: Kanthi Narahari Member(T) The present Appeal filed against the Order of the Learned Adjudicating Authority dated 06.01.2021 passed in IA No. 02 of 2021 in CP (IB) No. 72/BB/2019, whereby the Adjudicating Authority (National Company Law Tribunal, Bengaluru Bench, Bengaluru) dissolved the Corporate Debtor company. Appellants Submissions : - 1. The Learned Counsel for the Appellant submitted that the Appellant was not party to the proceedings before the Adjudicating Authority and they have never been informed about the Impugned Order. It is submitted that the Appellant is a Statutory Organisation comes under Ministry of Labour and Employment, Government of India and it has to act in accordance with law and procedure v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t , submitted that from the perusal of the Liquidation Order, it revealed that the Respondent has disbursed the entire amount as received from the sale of the Assets of the Corporate Debtor towards provisional expenses and some amount towards Financial Creditor, the said action is clearly in violation of Section 11 of the Employees Provident Fund Act (EPF Act). Further the Impugned Order (Order of Liquidation) is in violation of Section 36(4(a) (iii)) of I B Code 2016, wherefrom the provisions clearly lays that the Provident Fund dues are outside liquidation estate. It is submitted that Section 11(2) of the EPF and MP Act 1952, it prevails over all other enactments for the time being in force. As per the liquidation process, the Liquidator automatically becomes the employer of the establishment and he will be responsible for the entire affairs of the establishment. It caused a duty on him to clear the dues payable to the workers on priority. 5. The Learned Counsel also submitted that the Water Fall Mechanism contained in Section 53 of the I B Code will not be applicable. Further, as per Section 36(4(a)(iii)) of the Code, the EPF dues are outside the Liquidation Estate in light o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one in Regional language (Kannada). The Liquidator considering the Appellant as a Government Department, requested them to submit the proper claim referring to the public announcement. It is submitted that in spite of the request, the Appellant has not submitted a proper claim and hence, he was not included as Stakeholder under the liquidation process. As the claim of the Appellant has been rejected by the liquidator as the claim was defective (not Notarized) and Finalised the list of claim and stakeholders as per regulation 31 of (Liquidation Process Regulation). It is submitted that the Appellant has lost the opportunity to become Operational Creditor during CIRP and Stakeholder during Liquidation process and he did not participate any of the proceedings, before the Adjudicating Authority during these two years of time and now, the Corporate Debtor was dissolved vide Impugned Order dated 06.01.2021 of the Hon ble Adjudicating Authority . The Learned Counsel submitted that in view of the reasons the Appellant has no Locus Standi to file this appeal before this Tribunal also for the reason that the Appellant is not an aggrieved party, as defined under Section 61 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t CIRP and followed due process of law. Having nil value,` the Committee of Creditors recommended for liquidation of the Corporate Debtor and in pursuance thereof, the IRP filed an application for liquidation of the Corporate Debtor, accordingly the Adjudicating Authority ordered commencement of liquidation of the Corporate Debtor on 05.09.2019. The liquidator issued public announcement on 05.10.2019 in English newspaper inviting claims from the stakeholders of the Corporate Debtor on or before 30.10.2019. 17. The Appellant during CIRP process filed claim in Form F dated 03.07.2019 (Annexure-2 of the Paper Book). From the perusal of the claim, it is seen that the Appellant claimed a sum of ₹ 2,34,10,240/-. The IRP vide letter dated 06.07.2017 asked the Appellant to submit claim in Form E and stated that the claim which was made on 03.07.2019 in Form F is a wrong submission. The Appellant forwarded Form E on 08.07.2019 to the IRP and stated that the EPF dues as claimed in Form E be remitted in priority to all other dues by way of Demand Draft drawn in favour of the Regional Provident Fund Commissioner, RR Nagar, Bangalore. As stated supra, the IRP made p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il, the Liquidator may not be able to pool the funds, distribute the same(sum) in pursuance of Section 53 of the I B Code 2016. 19. The main contention of the Appellant is that Section 53 of the IBC is not applicable in the case of EPF. Since the Employees Provident Fund Act is a special Act and prevails over all other acts and submits that the dues which are payable to the employees cannot be treated as part of the asset of the Corporate Debtor. 20. There is no dispute with regard to that and we are in agreement with the said position of law. Even Section 36(4(a) (iii)) of I B Code 2016 states that the following shall not be included in the Liquidation Assets and shall not be used for recovery in the liquidation Sub Section:(4) of Section:36 of IBC reads as The following shall not be included in the Liquidation Estate assets and shall not be used for recovery in the Liquidation. Sub Clause (iii) of clause (b) of sub-Section (4) of Section 36 reads as under, All sums due to any Workman or employee from the provident fund, the pension fund and the gratuity fund . From reading of this provision, it is clear that a liquidation estate does not include the sums due to any wo ..... 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