Imp. Rulings - Assessment of PF dues during the Moratorium period.
Index;
NCLAT (2026.04.09) Employees Provident Fund Organisation, Kandivali vs Kailash Shah Resolution Professional of IT Source Technologies Ltd [Comp. App. (AT) (Ins) No. 324 of 2026 & I.A. No. 1231 of 2026]
NCLAT (2025.09.03) CA Pankaj Shah Vs. Employee Provident Fund Organisation (EPFO) and Anr., [(2025) ibclaw.in 699 NCLAT, Company Appeal (AT) (Insolvency) No. 17 of 2025 & I.A. No. 77, 102 & 103 of 2025]
NCLT Kochi (2025.07.09) Employees Provident Fund Commissioner vs CA Mahalingam Suresh Kumar [IA(IBC)/57/KOB/2024 In IBA/240/KOB/2019 In re Raihan Healthcare Private Limited.]
NCLAT (2025.01.03) Employees’ Provident Fund Vs. Jaykumar Pesumal Arlani (RP) (2025) ibclaw.in 10 NCLAT, Company Appeal (AT) (Insolvency) No.1062 & 1065 of 2024 & I.A. No.3665 of 2024]
NCLAT (2024.09.23) Gujarat Urja Vikas Nigam Ltd.. Vs. Mr. Udayraj Patwardhan (RP) [(2024) ibclaw.in 615 NCLAT, Comp. App. (AT) (Ins) No. 1183 of 2024 & & I.A. No. 4232 & 4954 of 2024]
NCLAT (2024.09.18) SBS Holdings Inc. Vs. Mohan Lal Jain [(2024) ibclaw.in 587 NCLAT, Company Appeal (AT) (Insolvency) No. 624 of 2024]
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1). NCLAT (2026.04.09) in Employees Provident Fund Organisation, Kandivali vs Kailash Shah Resolution Professional of IT Source Technologies Ltd [Comp. App. (AT) (Ins) No. 324 of 2026 & I.A. No. 1231 of 2026] held that;
This Tribunal has already taken the view in Company Appeal (AT) (Insolvency) No. 1062 of 2024 with Company Appeal (AT) (Insolvency) No. 1065 of 2024 decided on 03.01.2025 that after initiation of moratorium no assessment proceedings can be continued by EPFO which is prohibited.
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2). NCLAT (2025.09.03) in CA Pankaj Shah Vs. Employee Provident Fund Organisation (EPFO) and Anr., [(2025) ibclaw.in 699 NCLAT, Company Appeal (AT) (Insolvency) No. 17 of 2025 & I.A. No. 77, 102 & 103 of 2025] held that;
We hold that after initiation of moratorium under Section 14, sub-section (1), no assessment proceedings can be continued by the EPFO. If after an order of liquidation is passed, Section 33, sub- section(5), does not prohibit initiation or continuation of assessment proceedings.
No claim on the basis of assessment carried during the moratorium period, which is prohibited under Section 14(1) can be pressed in the CIRP.”
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3). NCLT Kochi (2025.07.09) in Employees Provident Fund Commissioner vs CA Mahalingam Suresh Kumar [IA(IBC)/57/KOB/2024 In IBA/240/KOB/2019 In re Raihan Healthcare Private Limited.] held that;
Tribunal held that employer and employee contributions to the Provident Fund, payable to employees via the PF Department, do not form part of the liquidation estate. Such amounts must be remitted to the PF Department and take priority over all other debts. The NCLT further clarified that PF contributions, whether for the CIRP or pre-CIRP period, enjoy priority over all claims. However, the remaining dues (e.g., interest, damages, or non-payable contributions) are treated as unsecured operational debts and are to be distributed in accordance with Section 53 of the Insolvency and Bankruptcy Code (IBC).
Under Section 40 of the Insolvency and Bankruptcy Code, 2016, the Liquidator is empowered to assess the revised claim. While the law affords only two options, which is either to accept or reject the claim, the liquidator could not have sent the claim directly to this Adjudicating Authority or suggest the claimant to approach this Adjudicating Authority directly without applying his mind on the fate of so-submitted claim.
It is well-established law that only claims existing as on the liquidation commencement date are admissible. Such claims must be filed within the time period specified by the Liquidator, as announced publicly after the commencement of liquidation process, or within any extended period granted thereafter.
Therefore, it is clear that Section 14(1)(a) and Section 33(5) of the Insolvency and Bankruptcy Code prohibits the institution of any suit or proceedings. Since the proceedings under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 are quasi-judicial in nature, they should not have been conducted after the passing of liquidation order. However, in this case, such proceedings were carried out and orders were passed at the liquidation stage. Thus, the proceedings/assessment post the liquidation commencement date will be hit by the provisions of Code, more particularly Section 14(1)(a) and 33(5) of IBC, 2016.
The subsequent re-assessment for same period under same heads after initiation of moratorium under Sections 14 & 33(5) of IBC, 2016 would not be permissible, apart from legal bar to conduct any such proceedings as discussed supra.
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4). NCLAT (2025.01.03) in Employees’ Provident Fund Vs. Jaykumar Pesumal Arlani (RP) (2025) ibclaw.in 10 NCLAT, Company Appeal (AT) (Insolvency) No.1062 & 1065 of 2024 & I.A. No.3665 of 2024] held that;
The Hon’ble Supreme Court in (2020) 13 SCC 208 – Rejendra K. Bhutta vs. Maharashtra Housing and Area Development and Anr. held that after the imposition of moratorium, a statutory freeze takes place.
the Hon’ble Supreme Court in Rejendra K. Bhutta (supra), it is clear that no proceeding can continue after imposition of moratorium, which has effect of depleting the assets of the CD or creating new liabilities on the CD, since the object or purpose of IBC is to resolve the CD.
Therefore, this Court held that the authorities can only take steps to determine the tax, interest, fines or any penalty which is due. However, the authority cannot enforce a claim for recovery or levy of interest on the tax due during the period of moratorium. We are of the opinion that the above ratio squarely applies to the interplay between the IBC and the Customs Act in this context.
From the above discussion, we hold that the Respondent could only initiate assessment or re-assessment of the duties and other levies. They cannot transgress such boundary and proceed to initiate recovery in violation of Sections 14 or 33(5) of the IBC.
The interim resolution professional, resolution professional or the liquidator, as the case may be, has an obligation to ensure that assessment is legal and he has been provided with sufficient power to question any assessment, if he finds the same to be excessive.
We hold that after initiation of moratorium under Section 14, sub-section (1), no assessment proceedings can be continued by the EPFO. If after an order of liquidation is passed, Section 33, sub-section(5), does not prohibit initiation or continuation of assessment proceedings.
No claim on the basis of assessment carried during the moratorium period, which is prohibited under Section 14(1) can be pressed in the CIRP.
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5). NCLAT (2024.09.23) in Gujarat Urja Vikas Nigam Ltd.. Vs. Mr. Udayraj Patwardhan (RP) [(2024) ibclaw.in 615 NCLAT, Comp. App. (AT) (Ins) No. 1183 of 2024 & & I.A. No. 4232 & 4954 of 2024] held that;
Explanation of Section 14 clearly stipulate that notwithstanding anything contained in any other law for the time being inforce, no license, permit, concessions or rights, etc., given by any other authority can not be suspended or terminated on ground of insolvency, subject to condition that there is no default in payment of current dues arising or use of continuation of license, permit, concessions or rights, etc.
We hold that if the Appellant has any recovery towards the Corporate Debtor, he is entitled to initiate suitable recovery proceedings, if allowed by the law and in accordance with the law, which is a different legal right then arising out of filing claims under present petition, but cannot file claims arising after CIRP date.
We hold that there is a clear law that Resolution Professional can only entertain claims due and filed w.r.t. CIRP commencement date and not due to subsequent event, for which claimant might have other legal remedy.
It is settled law that the Resolution Professional can collate and verify claims w.r.t. CIRP date and therefore any claims arising subsequent to CIRP date can’t be entertained by Resolution Professional.
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6). NCLAT (2024.09.18) in SBS Holdings Inc. Vs. Mohan Lal Jain [(2024) ibclaw.in 587 NCLAT, Company Appeal (AT) (Insolvency) No. 624 of 2024] held that;
The statutory scheme delineated by the above provisions, makes it clear that the claims to be filed by the claimants as on the liquidation commencement date. The Liquidation Regulations, does not contemplate consideration of any claim, which arises subsequent to liquidation commencement date.
Regulation 28 being the only Regulation, which deals with a payment not due on the liquidation commencement date and the distribution has been provided in a manner as contained in sub-regulation (2) of Regulation 28, it is clear that no other claim is contemplated to be considered, which is not available on the liquidation commencement date.
The statutory scheme delineated by Regulation 12 and Regulation 16, clearly contemplate that a claim has to be filed on the liquidation commencement date. When a claim has not arisen on the liquidation commencement date, the Regulation do not contemplate admission of such claim.
Regulation 13, as noted above, which provides for sending a Preliminary Report of the assets and liabilities as on the liquidation commencement date, clearly indicate that all liabilities have to be frozen on the liquidation commencement date and the statutory regulation does not contemplate admission of any claim arisen subsequent to liquidation commencement date.
We are also of the view that claim could not have been entertained by the Liquidator, which arose subsequent to the liquidation commencement date, no error has been committed by the Liquidator in rejecting the claim on the ground that it was filed much beyond the last date for admission of the claim, which was 15.01.2021 and claim was filed by the Appellant, after more than two years.
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