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TMI Blog2023 (10) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... nt itself. The Copy of Order dated 14.10.2019 by which amount of Rs. 68,54,869/- has been imposed is clearly after initiation of CIRP against the Corporate Debtor vide Order dated 30.09.2019 - it is not necessary in this proceeding to issue any direction for payment of the damages as imposed by the Order dated 18.10.2019 which was subsequent to CIRP imposition of moratorium. No direction need to be issued for payment of damages under Section 14B of Rs. 68,54,869/-. Another part of damages amounting to Rs. 31,16,446 which was imposed by order dated 25th July, 2017 - waive of damages under Section 14B of the Act - HELD THAT:- When Insolvency Resolution Process has been initiated against a Corporate Debtor and Resolution plan has been approved under IBC, power of Central Board to reduce or waive the damages can be exercised with regard to the damages imposed under Section 14B. Paragraph 32 of the 1952 Scheme as extracted above also contemplate recommendation by Board for Industrial and Financial Reconstruction, 1985 Act being not in force and substituted by Insolvency Regime there can be now no recommendation for waiver of the damages under Section 14B of Board for Industrial and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey Satpal, Advocate for R-1 JUDGMENT ASHOK BHUSHAN, J. 1. This Appeal has been filed against the Order dated 16th March, 2021 passed by National Company Law Tribunal, Ahmedabad Bench in I.A. No. 926 of 2020 in CP(IB) No. 148/NCLT/AHM/2019. By the impugned order, the Adjudicating Authority has approved the Resolution Plan submitted by Respondent No. 2-M/s N.A. Rota Machines Moulds India. 2. Regional Provident Fund Commissioner aggrieved by the Order in so far as treatment of its claim under the Resolution Plan, has come up in this Appeal. 3. Brief facts of the case necessary to be noticed for deciding this Appeal are:- (i) The Adjudicating Authority vide order dated 30.09.2019 admitted the Application under Section 9 of Insolvency and Bankruptcy Code, 2016 (IBC in short) filed by Operational Creditor against the Corporate Debtor-M/s. Perfect Boring Pvt. Ltd. (ii) The IRP got the notice published on 07.10.2019 calling upon the creditors of the Corporate Debtor to lodge their respective claims on or before 18.10.2019. (iii)The Appellant filed two claims in Form-F for Rs. 1,32,44,314/- (payable under Section 7A and 7Q of Employees Provident Fund Misce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n or of their dues were referred to in the claim. It is submitted that claims submitted by the Appellant are not workmen dues. It is submitted that in the Resolution Plan, workmen dues are being paid to the extent of 71.10%. It is submitted that the workmen dues having been paid to the extent of 71.10% which also included dues towards the provident fund clearly indicates that workmen dues towards PF has been fulfilled since no workmen has filed any appeal claiming their provident fund. It is submitted that copy of the Resolution Plan was shared with the Appellant by Resolution Professional but no objection was raised by Appellant to the Resolution Plan. It is submitted that PF Department is claiming to have found due on the basis of estimate while the Resolution Plan has already provided for the payment of actual workmen dues and as such the claim of PF Department stand subsumed in which plan an amount of Rs. 218.89 lacs made to the workmen. It is further submitted that the Appellant is not entitled to claim any damages under Section 14B. It is submitted that the claim of damages under Section 14B for amount of Rs. 68,54,869/- has been imposed by an order under Section 14B dated 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent No. 2 has stated that amount of Rs. 3,48,234/- have been paid to the PF Department on 23rd April, 2021. 8. The treatment of the dues of the Appellant thus in the Resolution Plan cannot be said to be in accordance with law. 9. We however need to consider rival submissions of the parties as to what extent the Appellant s claim is entitled to be accepted in so far as its payments is concerned. Learned Counsel for the Appellant has raised various submissions challenging the assessment made by the Appellant with regard to section 7A and 7Q as well as section 14B. The challenge to assessment orders, made by Appellant in exercise of jurisdiction under 1952 Act cannot be subject matter of challenge in the proceedings under IBC. We have to proceed on the basis of assessment made by statutory authority under 1952 Act and challenge to the said proceedings cannot be entertained in this proceeding. However, the submission of Respondent No. 2 with regard to damages as imposed on the Corporate Debtor needs consideration. From the claim forms which was submitted by the Appellant on 18.10.2019 annexed as Annexure C to the Appeal indicates that one of the assessment pertaining under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as follows: 32B. Terms and conditions for reduction or waiver of damages. - The Central Board may reduce or waive the damages levied under section 14B of the Act in relation to an establishment specified in the second proviso to section 14B, subject to the following terms and conditions, namely: (a) in case of a change of management including transfer of the undertaking to workers' co-operative and in case of merger or amalgamation of the sick industrial company with any other industrial company, complete waiver of damages may be allowed; (b) in cases where the Board for Industrial and Financial Reconstruction, for reasons to be recorded in its schemes, in this behalf recommends, waiver of damages up to 100 per cent may be allowed; (c) in other cases, depending on merits, reduction of damages up to 50 per cent may be allowed. 13. The above provision indicates that the Central Board is empowered to waive the damages under Section 14B of the Act. The Para 32B of the Scheme provides that Board for Industrial and Financial Reconstruction for reasons to be recorded in its schemes, in this behalf recommends, waiver of damages up to 100 per cent may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. However, looking to the fact that in the Resolution Plan to the extent of 71.10% workmen dues have been paid, the workmen dues obviously included payments towards PF and Gratuity. Workmen thus have received substantial amount of their dues. The workmen dues not only included the PF and Gratuity but unpaid salary. In the records of this Appeal, there are no details as regards the payments made to the workmen towards PF dues under Resolution Plan. The Resolution Plan makes the payment of the workmen dues to the extent of Rs. 218.89 Lacs out of total admitted dues of Rs. 307.86 Lacs. What is the bifurcation of PF dues under the payment of 218.89 Lacs which have directly been given to the workmen? We have noticed above that total claim admitted of the Appellant for dues under Section 7A and 7Q was Rs. 1,32,44,314/-, we are of the view that in the amount which is claimed by the Appellant towards 7A and 7Q, the amount which has already been paid to the workmen need to be deducted. Resolution Professional needs to compute the amount paid to the workmen under Resolution Plan towards PF dues. Resolution Professional being ex- Resolution Professional i.e. Respondent No. 1 we direct the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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