Employees Provident Fund Organisation Vs. Subhlaxmi Investment Advisory Pvt. Ltd. and Anr. - More so, when the claim on the basis of assessment, which has been made subsequent to initiation of moratorium, is hit by Section 14, sub-section (1) of the IBC, we are of the view that no such claim can be admitted in the CIRP.

  NCLAT (2026.01.09) in Employees Provident Fund Organisation Vs. Subhlaxmi Investment Advisory Pvt. Ltd. and Anr. [(2026) ibclaw.in 25 NCLAT, Company Appeal (AT) (Insolvency) No. 794 of 2025 and I.A. No. 3051 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, subsection (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.

• More so, when the claim on the basis of assessment, which has been made subsequent to initiation of moratorium, is hit by Section 14, sub-section (1) of the IBC, we are of the view that no such claim can be admitted in the CIRP.

• We have clearly noted the legal position that when the claim on the basis of assessment, which has been made subsequent to initiation of moratorium, is hit by Section 14, sub-section (1) of the IBC, we are of the view that no such claim can be admitted in the CIRP.

Excerpts of the Order;

This is an Appeal under Section 61 of the Insolvency and Bankruptcy Code, 2006 against the Impugned Order dated 28.03.2025 passed in IA (IB) (Plan) No. 3/CB/2024 IN CP (IB) No. 14/CB/2021, by National Company Law Tribunal, Cuttack Bench, Cuttack.

# 2. We have heard counsels of both sides and perused materials placed on record.

# 3. Appellant – EPFO has sought relief to set aside the Resolution Plan approved by National Company Law Tribunal (NCLT), Cuttack Bench vide order dated 28.03.2025 in I.A. (IB)(Plan) No. 3/CB/2024 in CP (IB) No. 14/CB/2021. The main reason for appeal is that while approving the Resolution Plan against the claim of Rs. 18,35,528/- towards FP dues, provisions of only Rs. 5,000/- mainly on the grounds that no claim was submitted by EPFO.

# 4. To appreciate the Appellant’s case, we look into the chronology of events, which is discussed hereinafter:

• CIRP of the Corporate Debtor (M/s Metistech Fabrication Private Limited was initiated on 01.11.2023. Thereafter, on 03.11.2023, RP published Form A to invite the claims from creditors. RP also sent intimation to the Appellant – EPFO on 21.11.2023 regarding initiation of CIR Proceedings and clearly conveyed about moratorium under Section 14 of the Code.

• In response to above communication from RP, EPFO (Regional PF Commissioner) on 22.12.2023 filed its claim of Rs. 50,676/- in a letter form but not in proper format and claimed that their dues are neither financial debt nor operational debt and conveyed that these dues pertains only to damages, interest and short remittances by the establishment and as regards principal, they will be conveyed in due course.

• RP requested EPFO on 22.12.2023 itself to submit claims as per format with supporting documents.

• Later on EPFO informed that their area enforcement officer has reported the total dues of establishment for the period 2020-21 & 2021- 22 to be Rs. 8,12,760/- basis the salary sheets provided by RP (as received from the suspended management), which included all the employees (also including the excluded employees).

• EPFO crystallised a demand of Rs 18,33,528/- (Rs 8,12,760 under 7A and Rs 9,70,092 under interest and damages) on the basis of an enquiry initiated by the EPFO department.

• Meanwhile Form G was published by RP on 30.12.2023 for inviting EoIs. Respondent No.1 – SRA submitted a Resolution Plan of total value of Rs. 45,00,000/- out of which Rs. 25,05,000/- was to be paid to the creditors. A sum of Rs. 5,000/- was provisioned against the demand of Rs. 18,33,528/- by EPFO along with a contingent liability clause covering any future liability however not exceeding the total liability beyond Rs. 25.05 lakh.

# 5. The Resolution Plan submitted by Respondent No.1 was approved by CoC on 21.09.2024 with 100% votes with IDBI as sole Financial Creditor. Thereafter, on 28.03.2025 the resolution plan of Respondent No.1 was approved by the Adjudicating Authority, which is being impugned in this case.

# 6. We note that CIRP against the CD was initiated on 01.11.2023 and thereafter only EPFO initiated assessment proceedings against the CD which were carried out by EPFO during the moratorium under Section 14 of the Code. It is to be noted that the EPFO – Appellant was aware about the initiation of CIRP on 21.11.2023, through a formal communication by Resolution Plan, in which the applicability of moratorium was also clearly conveyed.

# 7. It is to be noted that EPFO initially made demand on 22.12.2023 for a sum of Rs. 50,626/- for dues pertaining to 2020-2022 by the CD. Later on, basis its inspection through Enforcement Officer, it was raised to Rs. 8,12,760/- on 22.12.2023. Subsequently on 28.12.2023, it was further revised to a demand of Rs. 18,33,528/-, which included additional Rs. 9,70,092/- as interest and damages.

# 8. The Appellant also claims that the EPF Act is a social welfare legislation and provides for social security benefits of employees and workmen. The measure of mandatory creation of the Employees Provident Fund by establishments under the provisions of the EPF Act and the Employees’ Provident Funds Scheme, 1952 is as quoted by Justice V.R .Krishna Iyer in Organo Chemicals Industries v. Union of India reported in 1979 AIR 1803 is “to create a financial reservoir for the distribution of benefits to employees and workmen which is filled by the employer by deducting from the employees’ salaries and also by contributing its own equal share and duly making over the gross sums to the Fund. If the employer neglects to remit or diverts the moneys for alien purposes the Fund gets dry and the retiree employees are denied the meagre support when they need it the most. This prospect of destitution demoralizes the working class and frustrates the hopes of the community itself”. The provident fund dues are hard-earned money of the, which are deducted from their salaries but not deposited by the employer with the EPFO and the accrued interest thereon is not the asset of the Corporate Debtor but truly the assets of the employees in custody of the Corporate Debtor. As per Section 36(4)(a)(iii) of the Code, the entire employees provident fund dues are not the assets of the Corporate Debtor and are not subject to distribution as per Section 53(1) of the Code and therefore must be made in entirety to the Appellant by the Corporate Debtor. The Appellant also claims that EPFO dues are monies belonging to the employees, to be handed over by employers to EPFO for investment and safekeeping. The entrustment of these monies with the employers is merely a collection mechanism and is required to be understood as an unredeemed operational debt under IBC. While deciding on the statutory debt, the dues of The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 need to be kept outside by the CoC and paid in full by SRA. And for that it relies catena of judgments by Hon’ble Supreme Court and NCLAT such as:

• Kushal Ltd. vs Regional Provident Fund Commissioner-I, Civil Appeal No.1920 of 2020, decided on 20-05-2020 (SC);

• Jet Aircraft Maintenance Engineers Welfare Association v. Ashish Chhawchharia & Ors. [(2012) SCC OnLine NCLAT 418] dated 21/10/2022;

• Anuj Bajpai vs Employees Provident Fund Commissioner Com. Appl (AT)(Ins) 1141/2023.

# 9. We note that in this case, the books of accounts of the CD do not reflect, the amount deducted from the salaries of the employees and there is no such material on record that during the period of their employment any deductions had happened and the amount was not deposited by the CD with the EPFO. If it was so, it could not have been considered as asset of the CD. But in this case, we find that assessment has been made by the EPFO post moratorium. In this case, we find that there is no record to suggest that the Provident Fund was deducted contemporaneously by the CD, as such no record existed with the CD. An assessment was later on made by the EPFO basis, which is prohibited during moratorium. Therefore, these judgments are of no avail to the Appellant as the facts and circumstances are distinguishable in the present case.

# 10. Appellant also contends that computation of EPFO claims cannot be done by RP or NCLAT/NCLT. The main argument canvassed by the Appellant is that as per procedure, before commencement of assessment proceedings under Section 7A, 7Q and 14B of the EPF & MP Act, 1952, the Enquiry Officer prepares a report, based on which Show Cause Notice is issued to concerned company, giving them a fair opportunity to produce documents and assessment proceedings culminate into passing the final order under Section 7A of EPF Act. There cannot be a situation wherein: (a) EPFO cannot even continue with assessment proceedings during CIRP, (b) EPFO cannot continue with assessment after approval of Plan and claim from SRA later and (c) cannot even file claim based on its official records without proceedings with assessment. The claim cannot be rejected merely because it was based on Enquiry Officer Report which does not amount to “assessment” as per Section 7A of the EPF Act.

# 11. The arguments presented herein by the Appellant are against the scheme of the Code. We note that in this case assessment and claim by EPFO was made after initiation of CIRP and during the period of moratorium. Thus, it not mandatory for the RP to consider the same. RP also gets support from the judgment of this Appellate Tribunal in the matter of EPFO vs Jaykumar Pesumal Arlani Company Appeal (AT) (Insolvency) No.1062 of 2024 wherein it is held that after initiation of CIRP and imposition of moratorium under section 14 of IBC, no assessment proceedings can be initiated or continued by EPFO under section 7A, 7Q, 14B of EPF & MP Act and no claim based on such assessment can be admitted in CIRP. The said ratio is further affirmed in CA Pankaj Shah vs EPFO Company Appeal (AT) (Insolvency) No.77 of 2025 that demands made by EPFO on the basis of inspection and assessment orders passed during moratorium are unenforceable.

# 12. To further canvass its arguments, Appellant claims that on the order passed under Section 7A, an appeal was filed by RP/CD wherein a conditional order was passed on 18.10.2024 directing pre-deposit to be made within 30 days. Neither the RP nor SRA has confirmed whether such pre-deposit has been made in pursuance to said order. Appellant claims that it has been held in the case of GTC Industries Ltd. Vs Colelctor of Central Excise: 2013 (11) SCC 353 that when the period granted for pre-deposit has lapsed, the inevitable result is dismissal of appeals. We find the case to be of no assistance to the Appellants in the facts of the case, as such a situation will arise in a non-insolvency matter and is not applicable on a case in which moratorium is existing and that is the situation in this case.

# 13. Furthermore, we also note that the resolution plan duly provides for contingency liability clause stating to make good any such claim subject to the total amount under plan not exceeding Rs. 25.05 lacs. It is also to be noted that not a single employee of CD has filed any claim during CIRP towards their salary dues or pending PF contributions. We also observe that the Appellant was provided sufficient opportunities to file the claim in appropriate format but it did not do so. But even then, RP included the claim of the Appellant in the Information Memorandum and later the SRA – R1 had noted the claim and made appropriate provisions in the resolution plan. We also find that the plan has already been approved both by CoC and also by the Adjudicating Authority and EPFO is challenging it just on the basis that instead of total claim of Rs. 18,33,528/- only Rs. 5,000/- towards EPFO dues has been provided for.

# 14. Respondent-RP has relied on the judgement of Hon’ble Supreme Court in Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta (2019), Civil Appeal No. 8766-67 of 2019, wherein it was held that:

• “67. 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 business of the corporate debtor. All claims must be submitted to and decided by the resolution professional so that a prospective resolution applicant knows exactly what has to be paid in order that it may then take over and run the business of the corporate debtor. This the successful resolution applicant does on a fresh slate…”

We find that it surely supports the case of the SRA and also the RP.

# 15. Respondent-RP also relies on the following judgements:

a) Ghyanshyam Mishra & Sons v. Edelweiss Asset Reconstruction Co. Ltd., (2021 SCC OnLine SC 313), which upholds the “Clean Slate” theory under the Insolvency and Bankruptcy Code, 2016. As follows in para 86:

• “86. …the plan conforms to the requirements as are provided in subsection (2) of Section 30 of the I&B Code. Onley thereafter, the Adjudicating Authority can grant its approval to the plan. It is at this stage, that the plan becomes binding on Corporate Debtor, its employees, members, creditors, guarantors and other stakeholders involved in the resolution Plan. The legislative intent behind this is, to freeze all the claims so that the resolution applicant starts on a clean slate and is not flung with any surprise claims. If that is permitted, the very calculations on the basis of which the resolution applicant submits its plans, would go haywire and the plan would be unworkable…”

b) Electrosteel Steel Limited (Now M/S Esl Steel Limited) vs Ispat Carrier Private Limited, Civil Appeal No. 2896 OF 2024 (Arising out of SLP (C) No. 15823 of 2023) which upholds the following:

• “50. ….. it is by now well settled that once a resolution plan is duly approved by the adjudicating authority under sub-section (1) of Section 31, all claims which are not part of the resolution plan shall stand extinguished and no person will be entitled to initiate or continue any proceeding in respect to a claim which is not part of the resolution plan…”

We find that both above cited judgments also support the case of the respondents.

# 16. The Appellant claims that its dues have been rejected on the ground that dues are not filed in the prescribed format. Appellant places reliance on the judgment of Hon’ble Supreme Court in the matter of Greater Noida Industrial Development Authority Vs. Prabhjit Singh Soni and Anr. (2024) 6 SCC 767, wherein it was ruled that the Form in which a claim is to be submitted is directory and not mandatory and what is important is the claim must be supported by proof. The Appellant claims that the statutory forms under the Regulations formulated under the code are directory in nature and not mandatory, and the nature of Claim cannot be overlooked merely on the basis of an incorrect form. However, the said aspect was portrayed incorrectly by the Respondents.

# 17. We observe that in the facts and circumstances of the case, the resolution professional had noted the claim of the EPFO even though it was not filed in the prescribed format. And it was included in the Information Memorandum and the SRA had also acted upon that, therefore the facts of the case are distinguishable and the judgment cited by the Appellant will not be of any assistance to it.

# 18. Appellant tries to canvass the argument that AA was misled that after commencement of CIRP the EPFO raised dues u/s 74 of EPF Act to the tune of 18,33,528/-but no claim had been filed with respect to the same before the RP. Based on the above misleading statement, provision for a meagre amount of INR 5000/-was made against EPFO dues. We don’t find such arguments to be convincing as the IM notes the claims of EPFO even though not filed in proper format and SRA also makes provision which is endorsed by CoC and approved by AA. Perusal of the records reveal that even though the RP had advised the Appellant to file the claim in appropriate format, the Appellant had not filed them in those formats. Despite that Resolution Professional had included the claims in the Information Memorandum and the SRA has also provided for some amount for the EPFO.

# 19. The Appellant has also relied upon the judgment of Hon’ble High Court of Bombay (Nagpur Bench), Dalmia Cement (Bharat) Limited and Ors. Vs. The Central Board of Trustees, Employees Provident Fund Organization, Writ Petition No. 693 of 2022 decided on 29.04.2025. The relevant para is extracted as below:

• “ 21. It would thus be apparent that since the employers provident fund contribution cannot be included in the definition of ‘assets’, in view of explanation (a) to Sec. 18(1) of the IB Code, there would be no obligation upon the provident fund department to lodge a claim for the dues, in that regard with the IRP and get such claim verified so as to be included in the resolution plan.

• 21.1. Rule 12(2) of the IB Board of India (Insolvency Resolution Process for Corporate Person) Regulations, which requires a claim to be made with proof to the IRP on or before 90 days of the Insolvency commencement date, if a person fails to submit it within the time stipulated in the public notice / announcement, and Rule 13, which requires such claims to be verified by the IRP within 7 days from the last date of receipt of claims and to maintain a list of order form, will have to be construed in the context of the language of statutory provisions as contained in Chapter – II and specifically in light of the explanation (a) to Section 18 of the IB Code and in view of what has been held above.”

# 20. We find that in this case, it is not the case that the RP had not taken note of the claim of the EPFO. But RP included the claim in the Information Memorandum and also the SRA had made necessary provisions.

# 21. Another issue which has been raised by EPFO is whether a lower pay out towards Provident Fund dues can be approved in the resolution plan. Perusal of the facts, show that on the basis of the analysis of books of accounts, no amount is shown to be payable as Provident Fund dues. RP had requested the EPFO to file the claims. EPFO initially filed a small amount and then did its own inquiry and reassessment and filed a higher amount, which is being disputed by the RP and ex-suspended director. On the date of initiation of CIRP, there is nothing which is due to EPFO as per books of accounts and at the maximum it could be Rs. 50,626/- which is also not basis the books of accounts. But Rs. 5000/- has been provided in the resolution plan. Without books of accounts on record, it is just a nominal amount and approved as per the commercial wisdom of the CoC and which is non-justiciable. In case details of employees were available on record, situation would have been different. But herein only assessment are being made without EPF deductions being in Books of accounts. Without exact details of employees, it cannot be said that the resolution plan provides for a very low pay out towards Provident Fund dues. Moreover, it could not be done during the moratorium.

# 22. Appellant also relies on the judgment Regional Provident Fund Commissioner v. Prashant Jain Resolution Professional of Diamond Power Infrastructure Limited & Ors. CA (AT) (Ins) No. 937 of 2022 and relies on the following ratio:

• “8. The amount u/s 7A of Rs. 2, 42, 70,538/- having been admitted as the Provident fund Dues, it was obligatory on the part of the Resolution Professional/Resolution Applicant to include the entire payment as per the law laid down by this Tribunal in Jet Airways.”

# 23. We find that facts and circumstances of the case are different as in this case the amount was not filed formally and therefore not admitted. The citation, therefore, may not be of any assistance as in the cited case the claim was admitted basis the orders of the Adjudicating Authority.

# 24. Appellant has also relied upon the High Court of Patna in M/s Shiva Agro Industries Pvt. Ltd. Vs The Employees Provident Fund Organization and Others CWJC No. 16250 of 2025 on the following paras:

• “14. Apparently, the petitioner has not complied with its statutory duty to deduct employees share from their salary and to deposit the same in the provident fund. If the petitioner failed to discharge its statutory duties, it cannot be permitted to take the benefits of its own fault.

• 15. It is true that the assessment is to be made with regard to the identifiable employees only. However, it is the duty of the employer to prepare the list of employees engaged by it and if the employer fails to perform its duty, it cannot be allowed to take advantage of its own laches. Further, since the petitioner failed to produce the relevant records, wage register etc. and took a plea that a fire had taken place in the establishment on 10.10.1998 in which the establishment had been gutted, the respondents cannot be asked to supply the name, address and parentage of the employees engaged in the establishment.” [Emphasis supplied]

# 25. The EPFO relies on this case, to canvass the argument that the burden to prove is on the on the Corporate Debtor [employer] for showing the strength and identity of the employees and not on the Appellant [EPFO]. We do not find anything which is contrary in the facts and circumstances of the case as the RP and also the Suspended Director had cooperated with the EPFO in its inquiry and assessment. But the moot point is that assessment cannot be done, once the moratorium comes into existence and therefore the cited case is also of no assistance.

# 26. The Appellant also relies on the judgment of Hon’ble High Court of Delhi in Saraswati Construction Co v. Central Board of Trustees W.P.(C) No. 5625/2007 as cited below:

• 11. It is a settled legal position that if any establishment or employer is not covered under the said Act, then it is for the employer to place sufficient cogent and convincing material before the designated authority in an enquiry under Section 7A so as to satisfy the authority with regard to the non-applicability of the Act and on failure to place any such material, the onus cannot be shifted on the EPF authorities to prove the applicability of the Act, who under no circumstances, can be in possession of necessary records evidencing the extent of strength of employees in any particular establishment. In the case of Himachal Pradesh State Forest Corporation V. Regional PF Commissioner (Supra) cited by the counsel for the petitioner, being distinguishable on facts would not be applicable to the present case. As in the facts of the said case employer itself had admitted its liability under the Act and since due to delay of 16 years period, the employer was not in possession of the records, the Court directed the benefits only with respect to those employees who are identifiable and whose entitlement was proved on evidence. So far as the facts of the present case are concerned, the petitioner itself never came forward to place on record the documents or took any such plea of non-availability of the documents, therefore, the said judgment of the Apex Court will not cut any ice to help the petitioner in the facts of the present case.” [Emphasis supplied]

27. The above judgement deals with the applicability of Section 7A of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. The resolution professional has not questioned the inapplicability of the Act, therefore there is no relevance of the above judgement in the present case.

# 28. To canvass support the Respondent – RP relies on CA Pankaj Shah vs. Employees Provident Fund Organisation & Anr. Company Appeal (AT) Insolvency) No. 17 of 2025, para 10 extracted as below:

• 10. The above judgment clearly indicates that after initiation of the CIRP, no assessment can be initiated or continued against the Corporate Debtor so as to pass any pecuniary liability on the Corporate Debtor. In the present case, the EPFO has made demand on the basis of an alleged inspection report dated 10.05.2023 and assessment order dated 25.09.2023 which both were subsequent to initiation of CIRP on 17.02.2023. When no demand can be made on the basis of any inspection or assessment, we do not find any ground to allow the application IA No.409 of 2024 which was filed by EPFO where direction was sought to allow the entire claim of Rs.1,37,17,837/-.”  [Emphasis supplied]

# 29. This judgment clearly brings out that after initiation of the CIRP, no assessment can be initiated or continued against the CD so, as to fasten any pecuniary liability on the CD. This judgement supports the case of the Respondent No.2 – RP and also helps us to decide the case in hand.

# 30. Respondent – RP has also relied upon the judgment of this Appellate Tribunal in Employees Provident Fund Organization Regional Office, Vashi, Navi Mumbai Through Regional PF Commissioner-II (Legal) v. Jaykumar Pesumal Arlani Resolution Professional of M/s. Decent Laminates Pvt. Ltd CA(AT)(Ins) No. 1062 of 2024 as cited below:

• 24. In view of the aforesaid, we answer Question Nos. (1) and (2) in following manner:

• (1) 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, subsection (5), does not prohibit initiation or continuation of assessment proceedings.

• (2) 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.”

• Question No. (3)

• 25. It is an admitted fact that claims were filed by the Appellant subsequent to approval of Resolution Plan by the CoC. The Adjudicating Authority has relied on the judgment of the Hon’ble Supreme Court in RPS Infrastructure Ltd. Vs. Mukul Kumar & Anr. – Civil Appeal No.5590 of 2021 decided on 11.09.2023, which judgment squarely applies to the facts of the present case. More so, when the claim on the basis of assessment, which has been made subsequent to initiation of moratorium, is hit by Section 14, sub-section (1) of the IBC, we are of the view that no such claim can be admitted in the CIRP.”

# 31. In this case, we find that there is no record to suggest that the Provident Fund was deducted contemporaneously by the CD and as no such record existed with the CD. An assessment was made later on by the EPFO basis which a demand has been made and such an assessment is not allowed under the moratorium existing. We have clearly noted the legal position that when the claim on the basis of assessment, which has been made subsequent to initiation of moratorium, is hit by Section 14, sub-section (1) of the IBC, we are of the view that no such claim can be admitted in the CIRP. Therefore, in the facts and circumstances of the case, we find that the Appeal filed by the Appellant does not merit intervention for setting aside the impugned order dated 28.03.2025.

# 32. We uphold the orders of the Adjudicating Authority, which is extracted as below:

• “26. In view of the above discussion, the Resolution Plan submitted by Subhalaxmi Investment Advisory Pvt Ltd as approved by the CoC under Section 30(4) of the Code is hereby authorised for a total Pian Value of Rs. 45,05,000/- Forty Five Lakhs and Five Thousand Rupees) that includes Estimated CIRP Cost of Rs. 20 Lakhs, Rs 24.50 Lakhs as Liability towards Secured Financial Creditor, Rs. 50,000/- towards dues of Operational Creditors other than Statutory dues and Rs.5,000/- towards EPFO dues.

• The Resolution Plan so approved shall be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government, or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force such as authorities to whom statutory dues are owed, guarantors and other stakeholders involved in the Resolution Plan.

• 27. Under the provisions of Section 31(3) of the Code, we also direct as under:

• a) The moratorium order passed by the Adjudicating Authority under Section 14 of the Code on 28.03.2024 shall cease to have effect; and

• b) The Applicant/RP shall forward all records relating to the conduct of the CIRP and the Resolution Plan to the Board to be recorded on its database.

• 28. In view of the foregoing, IA (IB) (Plan) No. 3/CB/2024 is ALLOWED and DISPOSED OF.”

# 33. Accordingly, the Appeal is hereby dismissed. All IAs also disposed of. No order as to costs.

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CA Pankaj Shah Vs. Employee Provident Fund Organisation (EPFO) and Anr., - 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.”

  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.”

Excerpts of the order;

All these three Appeals have been filed against the same order dated 13.11.2024 passed by the Adjudicating Authority (National Company Law Tribunal) Indore Bench in IA No.5 of 2024 and IA No.409 of 2024. IA No.5 of 2024 was filed by the Resolution Professional- CA Pankaj Shah and IA No.409 of 2024 was filed by Regional Provident Fund Commissioner Employee’s provident Fund Organisation. Both the applications have been disposed of by the impugned order aggrieved by which order Resolution Professional as well as Employee’s Provident Fund Organisation has come up in this Appeal.

# 2. Brief facts of the case necessary to be noticed for deciding these Appeals are:-

2.1. The Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor- M/s. Premshree Prime Properties Private Limited commenced vide order dated 17.02.2023, CA Pankaj Shah was appointed as Interim Resolution Professional who has subsequently confirmed as Resolution Professional. On 11.05.2023, Employee’s Provident Fund Organisation (EPFO) initiated inquiry under Section 7A of the Employees’ Provident Fund and Miscellaneous Provision Act 1952 (hereinafter referred to as “EPF & MP Act 1952”). On inspection report dated 10.05.2023 submitted by its Enforcement Officer, it was communicated that amount of Rs. 33,99,135/- was worked out as due amount from the Corporate Debtor for the period April, 2015 to March 2021. A claim Form was also submitted by Employees’ Provident Fund Organisation to the Resolution Professional. A reply dated 25.05.2023 was sent by Resolution Professional to the EPFO requesting to submit proper claim Form as per Regulation 9 of the Insolvency and Bankruptcy (Insolvency Resolution for Corporate Persons) Regulations, 2016. EPFO did not submit claim Form and passed an order on 25.09.2023 under Section 7A of the EPF & MP Act 1952 determining amount of Rs.50,90,793/- and further an amount of Rs.50,66,686/- under Section 14B towards penal damages and Rs.35,60,358/- as interest for the belated remittances under Section 7 Q of the EPF & MP Act. A claim form was filed by EPFO to the Resolution Professional on 26.09.2023 praying for revising their dues as earlier submitted. IA No.346 of 2023 was filed by the Resolution Professional challenging the order dated 25.09.2023 passed by EPFO under Section 7A, 14B & 7Q which application was dismissed as not maintainable. By order dated 23.11.2023, Adjudicating Authority, however, also observed that the Resolution Professional can approach appropriate forum. IA No.5 of 2024 was filed by the Resolution Professional on 23.12.2023 praying for following reliefs:-

“(i) To pass an order to declare the demand made by the Respondent vide order dated 25.09.2023 u/s 7-A of the EPF & MP’s Act demanding a payment to the tune of Rs. 50,90,793/- as void and not enforceable against the Corporate Debtor, passed during the moratorium under section 14 of I&B Code, 2013.

(ii) To pass an order to declare the demand made by the Respondent vide order dated 25.09.2023 u/s 14-B of the EPF & MP’s Act demanding a payment to the tune of Rs. 50,66,686/· as void and not enforceable against the Corporate Debtor, passed during the moratorium under section 14 of I&B Code.

(iii) To pass an order to declare the demand made by the Respondent vide order dated 25.09.2023 u/s 7- Q of the EPF & MP’s Act demanding a payment to the of Rs. 35,60,358/- as void and not enforceable against the Corporate Debtor, passed during the moratorium under section 14 of I&B Code, 2013.

(iv) To pass an order to declare the notice dated 11.05.2023 sent by the Respondent as void and not enforceable.” 

2.2. The reply was filed by the EPFO to the IA No. 5 of 2024 objecting to the prayers. EPFO also filed an IA No.409 of 2024 in which application the EPFO prayed for following reliefs:-

“(a) Allow the present Application.

(b) Allow the entire claim of the Applicant being an amount of Rs. 1,37,17,837/- (Rs. One Crore Thirty- Seven Lakh Seventeen Thousand Eight Hundred Thirty Seven Only) as per the revised claim dated 29.09.2023 filed by the Applicant to the RP along with further interest as may be awarded, and the claim be considered as First charge over all other dues of the Financial Creditor/Corporate Debtor.

(c) Direct the Respondent herein to consider the claim of the Applicant in priority as per the provision of IBC, 2016 and EPF & MP Act, 1952 and Resolution Plan if approved be modified to include the claim of EPF;

(d) Pending the hearing and final disposal of this Application the Respondents be directed to retain assets of the value of Rs. 1,37,17,837/- (Rs. One Crore Thirty- Seven Lakh Seventeen Thousand Eight Hundred Thirty Seven only)) and not to distribute the same to enable the payment of the claim of the Applicant;

(e) Interim and ad-interim reliefs in terms of prayer clause (a) to (d) above;

(f) Such other and further reliefs as this Hon’ble Court deem fit and proper;” 

2.3. Adjudicating Authority heard both the applications IA No.05 of 2024 and IA No.409 of 2024 and by impugned order has disposed of both the applications. With respect to application filed by the Resolution Professional IA No.5 of 2024, Adjudicating Authority held that there was no bar in carrying out for assessment of the dues even during Moratorium period which would be payable by the Resolution Professional/ Successful Resolution Applicant and included accordingly in the Resolution Plan. With respect to IA No.409 of 2024, the Adjudicating Authority held that EPFO does not specifically mention details of the individual employees in whose respect the Provident Fund dues have been computed by the EPFO. EPFO was directed to provide the name and number of employees with year-wise details of the employees with respect to whom assessments have been made by them, together with the detailed computation which may be furnished by the EPFO to the Resolution Professional. Resolution Professional within period of one month will be at liberty to raise their objection with regard to computation made by EPFO. EPFO shall have to consider the objection. It is useful to notice the observations and findings by the Adjudicating Authority in paragraphs 22, 23, 24 & 25 which have been given by the Adjudicating Authority while disposing of both the applications:

“22. Therefore, considering the facts as discussed herein above, as regards the contention raised by the RP that the said order is passed in violation of the moratorium period we find that the there is a difference between assessment of the claim and recovery of the claim and in the instant case the EPFO has never initiated any recovery proceedings against the RP. But during the moratorium period the EPFO could not have issued summon to the RP and compelled him to attend their office. The RP’s main task during the period is to collect the claim and proceed for getting resolution plans following the procedure as laid down in the Code & Regulations thereof. We note the EPFO had enforced the presence of RP as many as in 14 hearings and that was not warranted in view of the very object of the code and the time line presented therein. We also note that the EPF dues are now computed for 2015 onwards. It is not understood why the office of the EPF had not initiated any action against the corporate debtor/ erstwhile management. They have initiated their inquiry/ assessment proceedings after almost 8 years, that too after the initiation of CIRP against the corporate debtors. Otherwise than that, there was no bar in carrying out for assessment of the dues even during moratorium period which would be payable by RP and/or SRA in terms of the provisions of the EPF Act and included accordingly in the resolution plan.

23. We further note that the claim raised by the EPFO does not specifically mention the details of the individual employees in whose respect the PF dues have been computed by the EPFO. Their claim based upon the notional computation cannot be considered as payable to the EPFO.

24. In view of the above, we are of the considered view that the EPFO will have to provide the name & number of employees with year-wise details of the employees with respect to whom assessments have been made by them, together with the detailed computation based on which the claim has been raised. Such details will have to be furnished by the EPFO to the RP within a period of one month. Then RP and / or SRA, in case resolution plan gets approved, will be at liberty to raise their objection as regard computation made by the EPFO and in that case the EPFO will have to consider the objection and revise their computation. Meanwhile, the SRA is also at liberty to amend the resolution plan accordingly by way of an addendum providing for the payment on EPF dues. Needless to clarify, that, the addendum, if any, will have to be approved by the COC and the same will have to be brought on record by the RP through affidavit in the matter of approval of resolution plan (IA 29 of 2024).

25. With these directions the application IA 5 of 2024 & IA 409 of 2024 in CP(IB) 37 of 2022 stand disposed of.”

2.4. Aggrieved by the aforesaid order dated 13.11.2024, these Appeals have been filed. Company Appeal (AT) (Insolvency) No.17 of 2025 has been filed by the Resolution Professional challenging the order passed by the Adjudicating Authority passed in IA No.5 of 2024. In the Appeal, following prayers have been made:-

“a) set aside the impugned order dated 13.11.2024 passed by Hon’ble National Company Law Tribunal, Indore Bench in IA/05/MP/2024 filed in CP (IB) 37/2022 filed by the Appellant; 

b) To pass an order to declare the demand made by the Respondent vide order dated 25.09.2023 under Section 7-A of the EPF & MP Act demanding a payment to the of Rs. 50,90,793/-(Rupees Fifty Lakhs Ninety Thousand Seven Hundred &Ninety Three Only) as void and not enforceable against the M/s Premshree Prime Properties Private Limited, passed during the moratorium under section 14 of I&B Code, 2013.

c) To pass an order to declare the demand made by the Respondent vide order dated 25.09.2023 under Section 14 B of EPF & MP Act demanding a payment to tune of Rs. 50,66,686/- (Rupees Fifty Lakh Sixty Six Thousand and Six Hundred Eighty Six) as void and not enforceable against the M/s Premshree Prime Properties Private Limited, passed during the moratorium under section 14 of 1&B Code, 2013.

d) To pass an order to declare the demand made by the Respondent vide order dated 25.09.2023 under Section 7 Q of the EPF & MP Act demanding a payment to the tune of Rs. 35,60,358/- (Thirty Five Lakh Sixty Thousand and Three Hundred Fifty Eight) as void and not enforceable against the M/s Premshree Prime Properties Private Limited, passed during the moratorium under section 14 of 1&B Code, 2013.

e) Any such other relief as the Hon’ble Appellate Tribunal may consider fit and proper.” 

2.5. Company Appeal (AT) (Insolvency) No.102 of 2025 has been filed by EPFO challenging the order dated 13.11.2024 passed by the Adjudicating Authority in IA No.5 of 2024. In the Appeal, following prayers have been made by the EPFO:-

“a) To set aside the impugned Order Dated 13.11.2024 Passed in I.A. No. 5(MP)/2024 ln C.P.(I.B.) No. 37(MP)/2022, By National Company Law Tribunal, Indore Bench, Court No. I; 

b) To award cost of the present appeal in favor of the Appellant; 

c) pass any such other/ further order(s) as this Hon’ble Tribunal may deem fit and proper in the facts and circumstances of the present case.” 

2.6. Company Appeal (AT) (Insolvency) No.103 of 2025 has been filed by the EPFO challenging the order dated 13.11.2024 passed in IA No.409 of 2024. In the Appeal, following prayers have been made:-

“a) To set aside the impugned Order Dated 13.11.2024 Passed In I.A. b) No. 409(MP)/2024 In C.P.(I.B.) No.37(MP)/2022, By National Company Law Tribunal, Indore Bench, Court No. I;

 b) To award cost of the present appeal in favor of the Appellant; 

c) pass any such other/ further order(s) as this Hon’ble Tribunal may deem fit and proper in the facts and circumstances of the present case.”

# 3. We have heard Learned Counsel for the Resolution Professional in support of his appeals and in opposition to the appeal filed by EPFO. Counsel for the EPFO has been heard in support of two appeals filed by EPFO as well as well as Respondents in appeal filed by the Resolution Professional.

# 4. Counsel for the Resolution Professional challenging the order passed by the Adjudicating Authority submits that the CIRP against the Corporate Debtor having commenced on 17.02.2023, the EPFO could not have initiated any proceeding under Section 7A for determination of the amount payable by the Corporate Debtor. The order under Section 7A, 7F and 14B has been passed on 25.09.2023. The EPFO has no jurisdiction to pass any order under Moratorium period to fasten any liability on the Corporate Debtor. On the basis of order passed during Moratorium period, no claim could have been admitted. First claim was submitted by EPFO on basis of an alleged inspection dated 10.05.2023 and thereafter a revised claim was filed on 26.09.2023 for Rs.1,37,17,837 which was impermissible. Counsel for the Resolution Professional relied on the judgment of this Tribunal in Company Appeal (AT) (Insolvency) No.1062 of 2024–“Employees’ Provident Fund Organisation Regional Office vs. Jaykumar Persumal Arlani, Resolution Professional of Ms/. Decent Laminates Pvt. Ltd.”. It is submitted that after declaration of the Moratorium, no assessment could have been passed nor on the basis of any assignment, any claim could have been filed. There is no occasion to admit any claim or mention the same in the Resolution Plan.

# 5. Counsel for the EPFO challenging the order passed by the Adjudicating Authority directing the EPFO to give the name of employees with details of computation, it is submitted that the Adjudicating Authority has no jurisdiction to enter into adjudication of claim under Section 7A, 14B and 7Q. It is submitted that under the EP & MP Act, 1952, it is statutory authorities who are entitled to adjudicate and pass order under Section 7A, 7Q & 14B. Direction of the Adjudicating Authority to the EPFO to give the name of employees and detail computation is uncalled for and beyond the jurisdiction. It is further submitted that the EPFO had also jurisdiction to submit a claim on the basis of inspection report dated 10.05.2023. Inspection report dated 10.05.2023 can very well be basis for determining the employees’ contribution which does not violate the Moratorium. It is submitted that the application filed by the Resolution Professional challenging the order dated 25.09.2023 has also been disposed of by the Adjudicating Authority directing the Resolution Professional to challenge the same in appropriate forum, hence, the order dated 25.09.2023 could not have been questioned in the proceedings.

# 6. We need to first examine the submissions of the Counsel for the Resolution Professional that after initiation of CIRP against the Corporate Debtor by order dated 17.02.2023 no determination could have been made by the EPFO nor any claim can be filed on the basis of any determination by the EPFO. As noted above, initially the EPFO filed its claim on the basis of inspection report dated 10.05.2023 demanding an amount of Rs.33,99,135/- as due from the Corporate Debtor for the period April 2015 to March 2021. Subsequently, an order under Section 7A was passed on 25.09.2023 determining amount of Rs.50,90,793/- and an order under Section 14B demanding an amount of damages and interest of Rs.35,60,358/- under Section 7Q. On the basis of the aforesaid order, claim was filed on 26.09.2023 to accept the revised claim. It is useful to notice revised claim submitted on 26.09.2023 by the EPFO which is as follows:-

26.09.2023 

“To, 

Sh. Pankaj Shah,
Interim Resolution Professional for M/s Premshree Prime Properties Pvt Ltd 112, Manas Bhawan, RNT Marg Indore-452001 

Subject:-Submission of Revised claim in respect of provident fund dues of M/s Premshree Prime Properties Pvt Ltd.

Madam/Sir, 

Please refer to order of Hon’ble National Company Law Tribunal in petition number CP(IB)/37(MP)2022 Dated 17/02/2023, directing your appointment as interim professional/liquidator in respect of M/s Premshree Prime Properties Pvt Ltd.

In this regard, EPF dues in respect of workers or employees of the establishment were informed vide letter dated 23/05/2023.However, during course of inquiry u/s 7A of EPF & MP Act, 1952 conducted for assessment of dues, your good self has raised objection regarding dues reported in the inspection report dated 10/05/2023. Accordingly, the dues are modified in order dated 25/09/2023 passed u/s 7A of the act.

Hence, EPF dues of claim, dated 23/05/2023 are revised and details of same are as below-

Dues	Period	Amount	Document
Dues of Provident Fund	05/08/2015-31/03/2021	5090793/-	7A order dated 25/09/2023
Damages u/s 14B	05/08/2015-25/09/2023	49742/-	Notice u/s 14B dated 25/09/2023
Interest u/s 7Q	05/08/2015-25/09/2023	25378/-	Notice u/s 7Q dated 25/09/2023
Notional dues of Damages calculated in respect of 7A order dated 25/09/2023	05/08/2015-25/09/2023	5016944/-	Notional Calculation Sheet dated 25/09/2023
Notional dues of Interest calculated in respect of dues of 7A order dated 25/09/2023	05/08/2015-25/09/2023	3534980/-	Notional Calculation Sheet dated 25/09/2023
Total		13717837/-

Your attention is drawn to section 36(4) of the Insolvency and Bankruptcy Code, 2016, which predicates that dues towards provident fund, pension and gratuity constitute third-party assets and, in the consequence, thereof, are excluded from the liquidation estate of the corporate debtor and cannot be utilized for making any recovery from him.

Your attention is also drawn to the judgement of Hon’ble NCLAT in Sikandar Singh Jamwal Vs Vinay Talwar (CA(AT)483/2019: judgement dated: 11/03/2022.

It would be pertinent to mention that EPF dues were already filed through letter dated 23/05/2023. However, due to further objection in reported dues, the claim is being revised and filed again. Further, it is to inform that inquiry proceedings are being initiated to assess the EPF dues only.

Hence, it is requested to admit the above mentioned EPF dues and inform the status of acceptance/rejection of the same at the earliest.

(Shobhit Shrivastava)
Regional Provident Fund Commissioner—I”

# 7. The demand made by the EPFO on the basis of inspection dated 10.05.2023 is clearly demand from the Corporate Debtor after commencement of the Moratorium. Similarly, revised claim submitted on 26.09.2023 on the basis of orders passed on 25.09.2023 where demand in pursuance of subsequent to Moratorium. This Tribunal has occasion to examine the consequences of Moratorium on assessment made by EPFO in Company Appeal (AT) (Insolvency) No.1062 of 2024-“Employees’ Provident Fund Organisation Regional Office vs. Jaykumar Persumal Arlani, Resolution Professional of Ms/. Decent Laminates Pvt. Ltd.” with Company Appeal (AT) (Insolvency) No.1065 of 2024- –“Employees’ Provident Fund Organisation Regional Office vs. Sanjay Kumar Lalit, Resolution Professional of Apollo Soyuz Electricals P. Ltd. & Anr.” decided on 03.01.2025. In the above case also, after commencement of the CIRP, EPFO initiated proceeding under Section 7A and passed an order under Section 7A, 7Q & 14B. Application was filed by EPFO before the Adjudicating Authority seeking a direction to the Resolution Professional to admit the claim which claim to be rejected. This Tribunal in the above case, examined the consequence of Moratorium and held that the assessment proceeding cannot be continued after initiation of CIRP. This Tribunal in the above judgment had framed questions in paragraph 9 which are as follows:-

• “9. From the submissions of learned Counsel for the parties, following issues arise for consideration:

• (1) Whether after imposition of moratorium under Section 14 of the IBC, assessment proceedings can be carried on by the EPFO under Section 7A, 14B and 7Q of the EPF & MP Act, 1952.

• (2) Whether any claim on the basis of assessment, subsequent to imposition of moratorium, can be admitted in the CIRP.

• (3) Whether claims, which were filed by the Appellant(s), subsequent to the approval of Resolution Plan by the CoC, could have been admitted in the CIRP.”

# 8. While answering Question Nos.1 and 2, this Tribunal has relied on the judgment of the Hon’ble Supreme Court in “(2020) 13 SCC 208 – Rejendra K. Bhutta vs. Maharashtra Housing and Area Development and Anr”. In paragraphs 11, 12 & 13, following was laid down: –

• “11. The Hon’ble Supreme Court had occasion to consider effect and consequence of imposition of moratorium. 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. In paragraph 25 of the judgment, following was held:

• “25. There is no doubt whatsoever that important functions relating to repairs and reconstruction of dilapidated buildings are given to MHADA. Equally, there is no doubt that in a given set of circumstances, the Board may, on such terms and conditions as may be agreed upon, and with the previous approval of the Authority, hand over execution of any housing scheme under its own supervision. However, when it comes to any clash between MHADA Act and the Insolvency Code, on the plain terms of Section 238 of the Insolvency Code, the Code must prevail. This is for the very good reason that when a moratorium is spoken of by Section 14 of the Code, the idea is that, to alleviate corporate sickness, a statutory status quo is pronounced under Section 14 the moment a petition is admitted under Section 7 of the Code, so that the insolvency resolution process may proceed unhindered by any of the obstacles that would otherwise be caused and that are dealt with by Section 14. The statutory freeze that has thus been made is, unlike its predecessor in the SICA, 1985 only a limited one, which is expressly limited by Section 31(3) of the Code, to the date of admission of an insolvency petition up to the date that the adjudicating authority either allows a resolution plan to come into effect or states that the corporate debtor must go into the liquidation. For this temporary period, at least, all the things referred to under Section 14 must be strictly observed so that the corporate debtor may finally be put back on its feet albeit with a new management.”

• 12. In (2021) 6 SCC 258 – P. Mohanraj and Ors. Vs. Shah Brothers ISPAT Pvt. Ltd., the Hon’ble Supreme Court had occasion to interpret the expression “proceeding” in Section 14. The object and purpose of moratorium has been captured in paragraph 30 of the judgment, which is as follows:

• “30. It can be seen that Para 8.11 refers to the very judgment under appeal before us, and cannot therefore be said to throw any light on the correct position in law which has only to be finally settled by this Court. However, Para 8.2 is important in that the object of a moratorium provision such as Section 14 is to see that there is no depletion of a corporate debtor’s assets during the insolvency resolution process so that it can be kept running as a going concern during this time, thus maximising value for all stakeholders. The idea is that it facilitates the continued operation of the business of the corporate debtor to allow it breathing space to organise its affairs so that a new management may ultimately take over and bring the corporate debtor out of financial sickness, thus benefitting all stakeholders, which would include workmen of the corporate debtor. Also, the judgment of this Court in Swiss Ribbons (P) Ltd. v. Union of India [Swiss Ribbons (P) Ltd. v. Union of India, (2019) 4 SCC 17] states the raison d’être for Section 14 in para 28 as follows : (SCC p. 55)

• “28. It can thus be seen that the primary focus of the legislation is to ensure revival and continuation of the corporate debtor by protecting the corporate debtor from its own management and from a corporate death by liquidation. The Code is thus a beneficial legislation which puts the corporate debtor back on its feet, not being a mere recovery legislation for creditors. The interests of the corporate debtor have, therefore, been bifurcated and separated from that of its promoters/those who are in management. Thus, the resolution process is not adversarial to the corporate debtor but, in fact, protective of its interests. The moratorium imposed by Section 14 is in the interest of the corporate debtor itself, thereby preserving the assets of the corporate debtor during the resolution process. The timelines within which the resolution process is to take place again protect the corporate debtor’s assets from further dilution, and also protects all its creditors and workers by seeing that the resolution process goes through as fast as possible so that another management can, through its entrepreneurial skills, resuscitate the corporate debtor to achieve all these ends.”

• 13. The plain reading of Section 14, sub-section (1) indicates that expression ‘suits or proceedings against the corporate debtor’ has been used. The word ‘proceeding’ is not qualified, so as to confine it to proceedings before the Civil Court. The proceedings, which have the effect on the assets of the CD are all covered in the expression ‘proceeding’. The question to be answered is as to whether after moratorium has been imposed, it was open for EPFO to proceed with the assessment proceeding. Learned Counsel for the parties state that during moratorium proceeding, no recovery proceeding can be initiated against the CD. However, submissions of the learned Counsel for the Appellant is that assessment proceedings against the CD may continue. Hence, the orders of assessment passed during moratorium period, were fully permissible and the claim on the basis of the said proceedings had to be admitted in CIRP.”

# 9. After considering the submission of the parties, this Tribunal came to the conclusion that after initiation of the CIRP, assessment proceedings cannot be continued. In paragraphs 23 & 24, following was laid down:-

• “23. In the present case, admittedly assessment has been completed after initiation of the moratorium. We, thus, are of the view that once order of liquidation is passed, moratorium under Section 14 comes to an end and moratorium under Section 33(5), which is differently worded, comes into play. Under Section 33(5), the expression used are “suit or other legal proceeding”, which occurs in Section 446 of sub-section (1) noticed above. Thus, bar is only against suit or legal proceeding and there is no bar against assessment proceeding to be conducted by statutory Authorities, including the EPFO. Thus, after the liquidation, it is open for EPFO to carry on the assessment. Section 33(5), cannot be held to apply on assessment proceedings. However, while looking to the expression used in Section 14(1), assessment proceedings before the EPFO, cannot be continued after initiation of CIRP.

• 24. In view of the aforesaid, we answer Question Nos.(1) and (2) in following manner:

• (1) 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.

• (2) 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.”

# 10. The above judgment clearly indicates that after initiation of the CIRP, no assessment can be initiated or continued against the Corporate Debtor so as to pass any pecuniary liability on the Corporate Debtor. In the present case, the EPFO has made demand on the basis of an alleged inspection report dated 10.05.2023 and assessment order dated 25.09.2023 which both were subsequent to initiation of CIRP on 17.02.2023. When no demand can be made on the basis of any inspection or assessment, we do not find any ground to allow the application IA No.409 of 2024 which was filed by EPFO where direction was sought to allow the entire claim of Rs.1,37,17,837/-.

# 11. Insofar as the application filed by the Resolution Professional being IA No.5 of 2024, the prayer was to seek a declaration that demand made under Section 7A, 7Q & 14B are not enforceable against the Corporate Debtor. In view of the law as laid down by this Tribunal, Resolution Professional has made out a case for issuing a direction that the said demand was unenforceable which arose on the basis of assessment made during the Moratorium. We having taken the view that the demand made by the EPFO on the basis of inspection report dated 10.05.2023 and assessment dated 25.05.2023 was not enforceable and the prayer made by the EPFO in IA No.409 of 2024 was not acceptable. It is not necessary to consider other submissions raised by EPFO challenging the direction issued by Adjudicating Authority directing the EPFO to give name of the employees with determination. We are satisfied that the order of the Adjudicating Authority passed in IA No.5 of 2024 as well as IA No.409 of 2024 is unsustainable. We do not see any necessity to consider any other submissions raised by the parties.

# 12. In result, we allow the Appeal filed by Resolution Professional being Company Appeal (AT) (Insolvency) No.17 of 2025, set aside the order passed by the Adjudicating Authority in IA No.5 of 2024. Order of the Adjudicating Authority passed in IA No.409 of 2024 is set aside. Company Appeal (AT) (Insolvency) Nos. 102 of 2025 and 103 of 2025 are disposed of. Parties shall bear their own costs.

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