TMI Blog2022 (7) TMI 772X X X X Extracts X X X X X X X X Extracts X X X X ..... iled by the Appellant on 02.02.2021. Aspect of delay - HELD THAT:- An unpardonable lackadaisical approach / attitude of the Party in pursuing a matter before the Competent Authority/ Tribunal is not to be accepted. The Law of Limitation being harsh, will affect a Litigant, but it has to be pressed into service with all its vigour and rigour in the considered opinion of this Tribunal - In Law, a Tribunal/ a Court of Law has no power to find out a device in granting Relief to a Party who may appeared to have been hard done by. To put is precisely, an Application for condonation of delay undoubtedly create a jurisdictional fetter against consideration of tangible / substantive matter on merits. A Tribunal cannot determine the sufficiency of cause, apart from the facts pleaded and made out in a given case. Just because the Appellant is a Statutory Organisation, no indulgence or latitude can be shown, since the Law applies to one and all in a level playing field. Appeal against Liquidator s Decision - HELD THAT:- Section 42 of the I B Code, 2016, enjoins that as against the decision of the Liquidator either accepting or rejecting the claims, a Creditor may prefer an Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limitation, the condonation of delay application I.A. No. 415 of 2022 in Comp. App. (AT) (CH) (INS) No. 182 of 2022 is to be allowed, in the interest of justice. 2. It is evident that the `impugned order in IA/442/CHE/2021 in TCP/413/IB/CB/2017 was passed by the `Adjudicating Authority , (National Company Law Tribunal), Division Bench, Court I, on 17.12.2021, and that the copy of the `impugned order was obtained by the `Petitioner / Appellant on the same day. 3. As a matter of fact, the instant `Appeal is to be filed within 30 days as per the I B Code, 2016. In this connection, the `Appellant adverts to the `Order of Hon ble Supreme Court of India in M.A. No. 21 of 2022 in M.A. No. 665 of 2021 in Suo Moto Writ Petition Civil No. 3 of 2020 dated 10.01.2022, thereby and whereunder at Paragraphs 5 and 6, it is observed as under: 5. Taking into consideration the arguments advanced by learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to dispose of the M.A. No. 21 of 2022 with the following directions: I. The order dated 23.03.2020 is restored and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice, allows I.A. No. 415 of 2022 (condone delay application) in Comp. App. (AT) (CH) (INS) No. 182 of 2022. No Costs. JUDGMENT (Virtual Mode) Comp. App. (AT) (CH) (INS) No. 182 of 2022: Introduction: 6. The Appellant has focussed the instant Comp. App. (AT) (CH) (INS) No. 182 of 2022, as an `Affected Person , on being dissatisfied with the `impugned order dated 17.12.2021 in IA/442/CHE/2021 in TCP/413/IB/CB/2017, passed by the `Adjudicating Authority (National Company Law Tribunal), Division Bench, Court I, Chennai. 7. According to the Learned Counsel for the Appellant the `Adjudicating Authority (National Company Law Tribunal), Division Bench, Court-I, Chennai, while passing the `Order in IA/442/CHE/2021 in TCP/413/IB/CB/2017, filed by the `Appellant / Applicant , wherein at paragraphs 4 to 10, had observed the following and dismissed the IA/442/CHE/2021, without costs: 4. Vide an Order dated 12.06.2018 this Tribunal ordered for liquidation of the Corporate Debtor and the Respondent was appointed as the Liquidator. The Liquidator had issued paper publication inviting the claim from the stakeholders on 18.06.2018. This late date for sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Applicant was not diligent in filing their claims during the Liquidation period and submitting their claims belatedly during the very end of the Liquidation period is nothing but an attempt to suppress their negligence of not filing their claims within the stipulated time i.e., on or before 14.07.2018 as published for by the Respondent. 9. It is also submitted that on 20.09.2019 i.e., after the commencement of the liquidation PF Department has filed Form-F (applicable to CIRP) which was rejected by the Ld. Liquidator. Form-G was filed only on 02.02.2021 i.e., after a delay of 934 days. 10. We have gone through the rival contentions of both the parties and observed that the EPFO Department has not followed the due process as prescribed under the IBC, 2016. The Supreme Court in the matter of P.K.R. Ramachandran -Vs- State of Kerala [1997] 7 SCC 556 has held that an essential pre-requisite of exercising discretion to condone the delay is that the Court must record its satisfaction that the explanation of delay was either reasonable or satisfactory. Further, in the present case the Applicant is not even aware whether the Company is under Liquidation or under the CIRP. In a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period from Apr 2016 to Dec 2017, damages under Section 14B of the Act and interest under Section 7Q of the Act for the said period amounting to Rs.30,01,853/- and further that a sum of Rs.9,71,047/- was further sought for, as short remittance. 12. Indeed, the Appellant was required to file Form-F with an affidavit before the Respondent, on 02.03.2018 and in all, a sum of Rs.1,34,55,603/- was sought by the Appellant. And added further, the Respondent had not replied till date, either admitting or rejecting the Appellant s claim. 13. It is projected on the side of the Appellant that the Respondent through his letter dated 26.06.2018 received on the side of the Appellant on 04.07.2018 informed that the Adjudicating Authority through an order dated 12.06.2018 has initiated the liquidation proceedings against the Corporate Debtor and that the Appellant was also informed that the Respondent was appointed as `Liquidator on the very same `Order . Besides this, the Respondent had directed the Appellant to prefer a `claim under I B Code, 2016, in the specified format without informing the Appellant that the earlier claim in Form-F would not be taken into account or would not be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to the notice of the Respondent through a Letter dated 24.05.2019, as regards the claim made by it on former occasions, and also the Respondent was informed that he was not communicating on this aspect to the Appellant. 19. It is the version of the Appellant that in the Letter dated 24.05.2019, the Appellant had also filed additional claims under Form-F (Supplementary) and sought for further payment of Rs.1,13,89,308/- for the period from Jan 2018 to Jul 2018 and Jun 2015 to Mar 2016. In fact, the Appellant had made a claim amounting to Rs.1,34,55,603/- relating to the period Jul 2015 to Mar 2016 and Apr 2016 to Dec 2017, the Supplementary Claim made on 24.05.2019 was in the character of an amendment to the initial claim, filed by the Appellant. 20. The Learned Counsel for the Appellant proceeds to make a mention that the Respondent through a Letter dated 09.07.2019 had admitted the claim earlier preferred by the Appellant, paid a sum of Rs.21,18,637/- (as part payment). In fact, the Appellant through a communication dated 12.07.2019 had mentioned to the Respondent that an outstanding sum of Rs,2,27,26,274/- remains to be paid in priority over all other claims. But the Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent Fund Organisation is exempted under the provisions of the I B Code, 2016. Also that, the `Adjudicating Authority had failed to appreciate that the `Appellant need not file `any claim before the `Resolution Professional since the sums due to the `Fund are exempted because of the fact the Appellant is not an `Operational Creditor . Appellant s Decisions: 26. The Learned Counsel for the Appellant relies on the `Judgment of the Hon ble Supreme Court of India in the matter of Employees Provident Fund Commissioner V O.L. of Esskay Pharmaceuticals Limited, reported in MANU / SC / 1327 / 2011, wherein it is observed that sub-section 2 of Section 11 of the Employees Provident Funds and Miscellaneous Provisions Act, 1952, declares that the amount due from an `Employer shall be the `First Charge of the Assets of the Establishment , and should be paid in priority to all other debts. 27. The Learned Counsel for the Appellant refers to the Judgment of this Tribunal in Company Appeal (AT) (INS.) No. 354 of 2019 with Company Appeal (AT) (INS.) 364 of 2019, Company Appeal (AT) (INS.) No. 404 of 2019 and Company Appeal (AT) (INS) No. 1001 of 2019 dated 19.12.2019, wherein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her excluding this asset from the liquidation estate leaving it to open to the workmen or to the PF Authority to realize their provident fund/pension fund/gratuity fund dues without standing in the line of water-fall mechanism. that provident fund dues are excluded from the liquidation estate so as to enable the workmen realize their saving as well as the matching contribution comes from the employer giving priority even above the costs of liquidator, because the liquidator is also entitled to realize the costs from the liquidation estate only, whereas the workmen for Provident Fund dues need not remain in the line to realize their PF dues from the liquidation estate. 29. The Learned Counsel for the Appellant points out the Order dated 12.09.2018 in MA No. 576 and 752/2018 in CP (IB) 1339 (MB)/2017, passed by the `Adjudicating Authority , (National Company Law Tribunal), Mumbai Bench, wherein at Paragraphs 30, 38 and 42, it is observed as under: 30. I believe that the right of all other creditors over the assets of the company is a property right, whereas workmen dues, more specially PF dues of workmen, are interwoven with Right to Life because the workmen all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Corporate Debtor and pay off the Provident Fund dues in priority to all other claims payable by the Corporate Debtor in liquidation. Discussions: 30. Before the `Adjudicating Authority (National Company Law Tribunal), Chennai Bench, the `Appellant/Applicant had filed IA/442/2021 in TCP/413/IB/CB/2017, seeking an `Order in directing the `Resolution Professional to make provision in the `Information Memorandum and corresponding `Resolution Plan , if any, for the payment of Claim of Rs.3,09,88,511/- as per the revised Form G Establishment wise under Section 14B, 7Q on 02.02.2021 for the period from 05/2015 to 11/2018 due to the applicant herein by condone the delay of 936 days in claiming the EPF MP Act, 1952, dues. 31. According to the Applicant/Appellant, the Applicant had intimated the Respondent that there was a due sum of damages Rs.6,56,113/- and an interest of Rs.3,14,934/- and totalling in all Rs.9,71,047/- to the Applicant and requested to forward a `Demand Draft for the said amount. In fact, the Applicant/Appellant had intimated on 02.03.2018 that the provisional assessment of PF dues for the period from 04/2016 to 12/2017 along with damages, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the same need not be specifically traversed herein by the Answering Respondent. However, the Applicant has alleged that the Corporate Debtor concern failed to remit the contributions of their employees for the period from 05/2015 to 11/2018 for a sum of Rs.1,17,34,011/-. It is submitted that this allegation is baseless without any substantiation. However, assuming without admitting the only claim value that can be admitted to Rs,1,01,96,123/- for a period of 05/2015 to 10/2017 a period before the initiation of CIRP. 15. Furthermore, in this Hon ble Adjudicating Authority in MA/57/2019 in TCP/413/2017 considered the application filed by the employees for (i) payment of salary for the month of August 2018 to December 2018, i.e. during the liquidation period when all the employees were discharged and no operation of the Corporate Debtor; (ii) categorically confirm the Corporate Debtor is continued as a going concern and pay wage and salaries; (iii) to obtain fresh claim applications from employees and workers for all lawful claims. The Hon ble Adjudicating Authority had rejected the application as it is not maintainable either in law or on facts, is devoid of merits. In accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or has neither uploaded the TRRN Challans nor given authorisation to anyone including the employees to do the same. In this regard, the Liquidator suspect of a collusion between the employees and the Provident Fund Department which fall within the provision of Section 66 of the Code which deals with fraudulent trading or wrongful trading. The Liquidator filed the additional report in MA/1313/2020, wherein the Liquidator appraised the Hon ble Tribunal the status of the Liquidation process of the Corporate Debtor company. Furthermore, the Respondent submitted before the Hon ble Tribunal with regard to the collusion between the employees and the present Applicant. Therefore, the present application is with an intent to defraud the Corporate Debtor concern and to make unlawful gain which is subject to be investigated by this Hon ble Tribunal. 19. It is submitted that the PF due claim was for the period from 05/2015 to 10/2017. On perusal of the claim filed by the RPF dated 02.02.2021 it is observed that the TRRN and the ECR was generated between 27.09.2018 and 04.10.2018. Further, these challans appeared to have been generated by some employees of the CD without any authority in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to complete the pending order on hand and for the purpose of other Liquidation related work, the Liquidator had engaged some workers and employees for whom a compensation in form of ex-gratia in lieu of salary was paid. The Liquidator had not issued any engagement letter for the employees/workmen for the period June to November 2018. The discharged employees were creating hindrances by approaching the Police to restrain the Liquidator making the handover of the premises to the SBI and ensuring the financial creditors to not participate the liquidation. 24. With regard to the averments and allegation made in para 13 to 15, it is vehemently denied as false and misleading. The allegation that the corporate debtor company being admitted to insolvency or liquidation was not within the knowledge of the Applicant is utterly surprising to believe. The Applicant is the Regional Provident Fund Commissioner II is well aware and has information with regard to the Corporate Debtor being admitted to insolvency and the Respondent had called for the claims from all creditors, vide his paper publication dated 16.12.2017. The Respondent received a claim from the Applicant corporation on 29 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw has no power to find out a device in granting `Relief to a `Party who may appeared to have been hard done by. To put is precisely, an `Application for condonation of delay undoubtedly create a `jurisdictional fetter against `consideration of tangible / substantive matter on merits . A `Tribunal cannot determine the `sufficiency of cause , apart from the facts pleaded and made out in a given case. 44. Just because the Appellant is a Statutory Organisation, no `indulgence or `latitude can be shown, since the `Law applies to one and all in a level playing field. In reality, the Officials must act with as much as diligent as is expected from a `Litigant , as per decision in District Board, Sargodha V Shemas Din123 I C 83. Appeal against Liquidator s Decision: 45. To be noted, that Section 42 of the I B Code, 2016, enjoins that as against the decision of the Liquidator either accepting or rejecting the claims, a `Creditor may prefer an `Appeal before the `Adjudicating Authority and it cannot be gainsaid that the `process of Liquidation is to be completed, within the prescribed time and conclusion of proceedings in this regard, is to be made within one year ..... X X X X Extracts X X X X X X X X Extracts X X X X
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