Case Title: Employees Provident Fund Organisation v. Subodh Kumar Agarwal
The National Company Law Appellate Tribunal, principal bench adjudicating in this case requested the Ministry of Corporate Affairs to alter the Insolvency and Bankruptcy Board of India Regulations in order to make adequate changes in the creditor claims pertaining to the insolvency laws.
In this case, the EPFO had challenged an order before the NCLAT against the NCLT Kolkata, the adjudicating authority that confirmed the resolution plan of insolvent firm- Ambient Computronics.
The counsel on behalf of Resolution Professional contended that the assets of the corporate debtor are under the ambit of the provident funds and no amount is required to be paid by the firm.
In the present case, the direction was passed after highlighting significant loopholes that deal with statutory claims in the IBC. In this case, the tribunal opined that an amendment was required to the IBC and thereby requested an amendment to the Insolvency and Bankruptcy Code. Furthermore, the Tribunal was of the opinion that resolution professionals are mandated to incorporate statutory authority in the resolution plan and that the ambit of the same should be extended to the extent that those claims should be in the books of a firm seeking resolution.
Furthermore, in this case, the Tribunal observed that, though EPFO had submitted no claim, both RP and bidders cannot be denied and were aware of Ambient owing them Rs. 6.16 lakh. Thereafter, the resolution plan and imposed provident fund were challenged by the EPFO and dues of Rs 12.17 lakhs on Ambient.
In the instant case, the EPFO was not included in the resolution plan of the firm to which debt was owed. The Tribunal highlighted the RP's responsibilities and observed that "the provisions of the code and regulations do not contemplate any cognizance of any ongoing proceeding under which a corporate debtor may be saddled with any liability, financial or otherwise."