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TMI Blog2025 (5) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... ad filed Insolvency proceedings for initiation of Insolvency Regulation, in which by an order dated 5.4.2017 passed by the National Company Law Tribunal (NCLT for short hereinafter) in CP No. 66/2017 one Mr. Vijaykumar Iyer was appointed as the Interim Resolution Professional (IRP for short hereinafter) (page 31). The said IRP by a public announcement dated 11.4.2017, called upon the creditors of the original petitioner company to submit proof of their claims on or before 19.4.2017 to him (p32). The respondent, by communication dated 4.10.2017 (p38) intimated a claim of Rs. 54,98,118/- with the IRP. By the communication 28.10.2017 (p39), the IRP, intimated, the respondent, to file a proof of claim in the relevant form as provided in the CIRP Regulations copy of which was enclosed as Annexure 2 to the communication. The respondent thereafter, it appears has not filed anything with the IRP. The proceedings went ahead as a result of which a resolution plan came to be submitted to NCLT by the IRP, in which though it was indicated that the EPFO/respondent had by their letter indicated a claim of Rs. 54,98,118/- the verifiable amount was nil (pg.162). The resolution plan came to be appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the parties on 06/03/2025; 07/03/2025, on which dates the following arguments were advanced. 3.1. Mr. Sundaram, learned Counsel for the respondent invites our attention to Section 5 of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (for short hereinafter "EPF Act") to contend that the provident fund is a fund of the employees, and therefore, will have to be considered as an 'asset' and not as a 'debt' and therefore, cannot be made a subject matter of the resolution plan, in terms of Section 30 of the Insolvency and Bankruptcy Code, 2016 (for short hereinafter "IB Code"). 3.2. He further invites our attention to Section 30 (2) Clause - (b), of the IB Code, which provides that the resolution plan should ensure that it does not contravene any of the provisions of the law for the time being in force, in reference to which, he relies upon Section 36 (4) (a) (iv) by which all sums due to any workman or employee from the provident fund, pension fund and the gratuity fund, stand excluded from the Liquidation Estate Asset and are held not be liable to be used for recovery in the liquidation. He further invites our attention to Section 18 of the IB Code, which lay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cement unit, as against which the solvent extraction and paper unit were not the subject to the resolution plan. These are acquired by the petitioner Nos.2 and 3, by virtue of amalgamation, in terms of Section 230 and 231 of the Companies Act, which has been approved by the order dated 05/05/2022 (page 416) and insofar as these units are concerned, since the entire liability to pay the EPF dues to the workers has been taken over by the transferee company in terms of clause 16.1 and 16.3 of the amalgamation scheme (pg.489), the same cannot be questioned in the present petition, by an omnibus prayer in terms of prayer clause (i). It is also contended that right to provident fund, being a statutory right, cannot be extinguished on account of any resolution plan which may be approved by the authority under the IB Code. 3.3. Mr. Bhangde, learned Senior Counsel for the petitioner, in rebuttal, in respect of the decision in Fanendra Harakchand Munot (supra) by the NCLAT relied upon by the learned counsel for the respondent, invites our attention to para 3 thereof, to contend that in the said case the resolution plan was approved and a claim for the EPF dues was made subsequent thereto, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenge before NCLAT came to be decided by Judgment dated 24/01/2020 (page 212), f urther challenge before the Apex Came to be rejected by orders dated 20/11/2020 in Civil Appeal 3169-3170 of 2020 Lalchand Maloo vs. Vijay Kumar (page 239); 12/02/2021 Murlidhar Suganchand Agrawal vs. Vijay Kumar Civil Appeal No. 3956/2020(page-240); 03/05/2021 Prashant vs. Vijay Kumar Civil Appeal Nos.1701 - 1710 of 2021 (page 241), the rights of the EPFO, to claim the EPF dues according to him stood extinguished. 3.7. He further contends that the provisions of resolution are in Chapter II of the IB Code from Sections 6 to 32-A of the I & B Code therefore both operate in different fields, on account of which also Section 36 (4) (a) (iii) is not applicable, as the same would be applicable only when a liquidator is appointed in terms of 33 (1) of the IB Code. 3.8. Jet Aircraft (supra) relied upon by Mr. Sundaram, learned counsel for respondent, according to Mr. Bhangde learned Senior counsel for the petitioners is not applicable in view of the position that it was rendered in the factual background narrated in para 2 thereof where the question for consideration was whether approval of the resol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bility to pay the dues stands admitted by the petitioner, however, in view of the contention that it is not included in the resolution plan, the same would not have any effect as the order of recovery of the Provident Fund dues, has now become unexecutable. He therefore, submits that in case, the petition is allowed in terms of prayer clause (i) the deletion of the challenge to order dated 04/02/2020 would not adversely affect the petitioner in any manner whatsoever. 3.14. He further invites our attention to para 2 of the order dated 24/01/2020 passed by NCLAT, New Delhi (pg. 218), to contend that the argument by Mr. Sundaram, learned Counsel for the respondent that the resolution plan was only in respect of Murli Industries and not in respect of its paper and solvent extraction unit, is factually incorrect, as the workers of the paper and solvent extraction unit had filed Company Appeal (Insolvency) No.871-872 of 2019 challenging the approval of the resolution plan on the ground that they would be adversely affected. He further invites our attention to para 30(iii) (page 236) of the same order, which holds by relying upon ESSAR - holds that claims which were not dealt under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of a claim which is due from any person and includes a financial debt and operational debt; CHAPTER II CORPORATE INSOLVENCY RESOLUTION PROCESS 18. Duties of interim resolution professional.- (1) The interim resolution professional shall perform the following duties, namely:- (a) collect all information relating to the assets, finances and operations of the corporate debtor for determining the financial position of the corporate debtor, including information relating to- (i) business operations for the previous two years; (ii) financial and operational payments for the previous two years; (iii) list of assets and liabilities as on the initiation date; and (iv) such other matters as may be specified; (b) receive and collate all the claims submitted by creditors to him, pursuant to the public announcement made under sections 13 and 15; (c) constitute a committee of creditors; (d) monitor the assets of the corporate debtor and manage its operations until a resolution professional is appointed by the committee of creditors; (e) file information collected with the information utility, if necessary; and (f) take control and custody of any asset over whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the committee of creditors for its approval such resolution plans which confirm the conditions referred to in sub-section (2). (4) The committee of creditors may approve a resolution plan by a vote of not less than seventy five per cent. of voting share of the financial creditors. (5) ---------: (6) The resolution professional shall submit the resolution plan as approved by the committee of creditors to the Adjudicating Authority. CHAPTER III LIQUIDATION PROCESS 33. Initiation of liquidation.- (1) Where the Adjudicating Authority,- (a) before the expiry of the insolvency resolution process period or the maximum period permitted for completion of the corporate insolvency resolution process under section 12 or the fast track corporate insolvency resolution process under section 56, as the case may be, does not receive a resolution plan under sub-section (6) of section 30; or (b) rejects the resolution plan under section 31 for the non-compliance of the requirements specified therein, it shall- (i) pass an order requiring the corporate debtor to be liquidated in the manner as laid down in this Chapter; (ii) issue a public announcement stating that the corporate debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apter; (g) any asset of the corporate debtor in respect of which a secured creditor has relinquished security interest; (h) any other property belonging to or vested in the corporate debtor at the insolvency commencement date; and (i) all proceeds of liquidation as and when they are realised. (4) The following shall not be included in the liquidation estate assets and shall not be used for recovery in the liquidation:- (a) assets owned by a third party which are in possession of the corporate debtor, including- (i) assets held in trust for any third party; (ii) bailment contracts; (iii) all sums due to any workman or employee from the provident fund, the pension fund and the gratuity fund; (iv) other contractual arrangements which do not stipulate transfer of title but only use of the assets; and (v) such other assets as may be notified by the Central Government in consultation with any financial sector regulator; (b) assets in security collateral held by financial services providers and are subject to netting and set-off in multi-lateral trading or clearing transactions; (c) personal assets of any shareholder or partner of a corporate debtor as the case may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the words ten per cent., at both the places where they occur, the words twelve per cent shall be substituted: Provided further that --. Explanation 1.-For the purposes of this section -------. Explanation 2.-For the purposes of this section, -------. 5. The necessary facts, for the purpose of determination of the controversy in issue, are as under: 5.1. Company Petition No. 66 of 2017 was filed under section 7 of the IB Code by the Financial Creditor Edelweiss Asset Reconstruction Company Limited ("EARC" for short hereinafter) against the Corporation Debtor/Murli Industries for initiation of the corporation insolvency resolution process, which was admitted by the NCLT by the order dated 05/04/2017 and Mr. Vijaykumar V. Iyer was appointed as the Interim Resolution Professional (IRP). 5.2. At the same time, 6 winding up petitions being Company Petition No. 8 of 2011; M/s Regent Overseas Pvt. Ltd. v. M/s. Murli Industries Ltd.; Company Petition No.9 of 2011; M/s. Sunmax General Trading LL. Dubai (UAE) v. Murli Industries Limited; Company Petition No. 10 of 2011, Cethat Ltd. Tiruchirapalli, Tamilnadu v. M/s. Murli Industries; Company Petition No. 3 of 2012, Botliboi Env ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2012, the learned Single Judge of this Court, by considering the fact, that the issue involved in CA No. 10 of 2017, would have a bearing upon the determination of the resolution process one way or the other, pending before the NCLT, expected that the NCLT would not go ahead with the hearing of the resolution process, till the application was finally disposed of by this Court. 5.6. By common order dated 02/11/2018, while partly allowing the CA No. 10 of 2017, leave was granted to continue with the corporate insolvency resolution process to the extent, it is carried out under Chapter II, Part-II of the IB Code and it was also directed, that all the creditors and also the operational creditors including the workers having preferential claims under section 529-A of the Companies Act, 1956 shall be allowed to submit their respective claims, by the resolution professional by suitably extending the last date of submission of claims, after which the resolution professional shall take necessary steps for completion of the resolution process in accordance with law. It was also directed, that in case, the NCLT fails to revive or successfully implement the resolution plan, this Court seize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 212). 5.10. A further challenge to this, before the Hon'ble Apex Court came to be rejected by orders dated 20/11/2020 in Civil Appeal Nos.3169-3170 of 2020 Lalchand Maloo vs. Vijay Kumar (page 239); 12/02/2021 Murlidhar Suganchand Agrawal vs. Vijay Kumar Civil Appeal No. 3956/2020(page-240); 03/05/2021 Prashant vs. Vijay Kumar Civil Appeal Nos.1701-1710 of 2021 (page 241). 5.11. Thereafter, an application was filed under sections 230 to 232 of the Companies Act before the NCLT, Mumbai, being CA (CAA) No. 101/MB/2021 and CP (CAA) No. 219/MB/2021 (Pg.416) seeking sanction, to a composite scheme of arrangement and amalgamation amongst Murli Industries Ltd. (Corporate Debtor) and the present petitioners in which by the judgment dated 05/05/2022, sanction was awarded with the appointed date fixed as 31/03/2020 to the scheme of arrangement and amalgamation as submitted with the said application. A similar application, being moved before the NCLT, Chennai vide CP/65/CAA/2021 in CA/34/CAA/2021 on account of the fact that Dalmia Cement (Bharat) Ltd. had its registered office at Dalmiapuram Tiruchirappalli, Tamilnadu, the same also came to be allowed by the order dated 10/06/2022 (Pg.44 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot form part of the resolution plan also needs to be considered. 7. At the outset, the contention of Mr. Bhangde, learned Senior Counsel for the petitioners, that Section 36 (4) (a) (iii) of the IB Code, does not apply to insolvency resolution proceedings, needs to be considered. In this context, what is necessary to note, is that section 36 (4) (a) (iii) of the IB Code, falls in Chapter III of the IB Code, which relates to the liquidation process, sections 33 to 54 of which, lay down the mode, method and manner, in which liquidation of a corporate debtor, has to be carried out. As against this, the Insolvency Resolution Process, is contained in Chapter II of the IB Code, wherein by virtue of sections 6 to 32-A, the mode, method and manner of the insolvency resolution process, is laid down. What is also necessary to note, is that section 33, which relates to initiation of liquidation, indicates the parameters, in which, the liquidation process has to be initiated. In terms of section 33 (1) (a) if the Adjudicating Authority before the expiry of the insolvency resolution process, or the extended period does not receive a resolution plan, under section 30 (6) [Section 33 (1) (a)] or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .3 (Pg.51) of which, indicates, that the corporate debtor operated three business segment- (1) Cement Undertaking, (2) Paper Unit and (3) Solvent Extraction Unit. This resolution plan was approved by the COC and submitted to the NCLT for approval, and was approved by the order dated 03/07/2019, and also indicates, that the resolution plan, was in respect of all the three undertakings of Murli Industries-(1) Cement Undertaking, (2) Paper Unit and (3) Solvent Extraction Unit. Para-72 of the said order, (Pg.192) specifically records the intention of the resolution applicant to run the business by reviving the Cement Undertaking as a going concern and selling the Paper and Solvent Extraction Units of the business, as they do not appear to be viable. It is after considering this, that the NCLT has approved the resolution plan, by the judgment dated 03/07/2019, as it stands modified on 22/07/2019, challenge to which, before the NCLAT as well as the Hon'ble Apex Court has been rejected. It would therefore be not correct for Mr. Sundaram, learned counsel for the respondent to contend, that the resolution plan did not include the Paper and Solvent Extraction Units of Murli Industries. 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de available for the payment of debts, whether belonging to the estate of a deceased person or not; property in general all that one owns, considered as applicable to the payment of his debts; as, his assets are much greater than his liabilities. In Velchand Chhaganlal v. Mussan [14 Bom LR 633] it was held that the word "assets" means, a man's property of whatever kind which may be used to satisfy debts or demands existing against him. 61. As per Salmond's Jurisprudence, the word "property" means-in its widest sense, property includes a person's legal rights, of whatever description. A man's property is all that is his in law. This usage however, is obsolete at the present day, though it is common enough in the older books. In a second and narrower sense, property includes not all a person's rights, but only his proprietary as opposed to his personal rights. The former constitutes his estate or property, while the latter constitute his status or personal condition. In this sense a man's land, chattel, shares and the debts due to him are his property; but not his life or liberty or reputation.... In a third application, which is that adopted (here) the term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition, be it movable or immovable, tangible or intangible. The concept of the power of disposition on account of its control or possession, is thus inviolate in the word 'asset'. It would also include property of all kinds, which again would relate to the concept of something over which one has dominion or control of disposition. 10.8. The provident fund of an employee is a combination to two components. Employees Contribution, being that amount, which is deducted from the salary/wages payable to an employee, which deduction is made by the employer. The other component being the contribution to be made by the employer, generally known as the Employer's contribution. Both combined, constitute the provident fund of an employee. Under section 5 (1) of the EPF Act, a fund is required to be established after framing of the Employees Provident Fund Scheme, which is to be administered by the Board constituted under section 5A of the EPF Act. In terms of section 6 of the EPF Act, the contribution, which shall be paid by the employer to the Fund shall be 10% (or such other sum, as is prescribed) of the basic wages, dearness allowance and retaining allowance (if any) for the time being pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the failure of the project and psychic demoralisation of the miserable beneficiaries when they find their wages deducted and the employer get away with it even after default in his own contribution and malversation of the workers' share. 'Damages' have a wider socially semantic connotation than pecuniary loss of interest on non-payment when a social welfare scheme suffers mayhem on account of the injury. Law expands concepts to embrace social needs so as to become functionally effectual. 40. The measure was enacted for the support of a weaker sector viz. the working class during the superannuated winter of their life. The financial reservoir for the distribution of benefits is filled by the employer collecting, by deducting from the workers' wages, completing it with his 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 retirees are denied the meagre support when they most need it. This prospect of destitution demoralises the working class and frustrates the hopes of the community itself. The whole project gets stultified if employers thwart contributor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 3 (8) r/w section 3 (7) of the IB Code as Chapter-II does not define what a 'Corporate Debtor' is]. It can also be initiated by a Corporate Applicant, as defined in section 5 (5) read with section 10 of the IB Code, which includes a 'Corporate Debtor'. The entire purpose and object of Chapter-II of the IB Code is to explore the possibility of revival of the Company, which is unable to pay its debts, so as to save the company from Liquidation. In the process of doing this an Interim Resolution Professional (IRP for short hereinafter) is appointed in terms of section 16 of the IB Code, for management of the affairs of the corporate debtor, in terms of section 17, thereof. While doing this certain duties are imposed upon the IRP, in terms of section 18. Sec. 18 (1) (f) and Explanation to section 18 (1) of the IB Code, which are already reproduced earlier. 12. What is necessary to note, is that the duties, of the IRP in terms of section 18 (1) (f), direct taking control and custody of any asset, over which the corporate debtor has ownership rights as recorded in the balance-sheet of the corporate debtor. This would be indicated, by the expression "any asset over which the corpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of clause (a) thereunder, 'assets', owned by a third party in possession of the corporate debtor held under trust or under contractual arrangements including bailment. The exclusion clause (a) in the explanation to Sec. 18 (1) read in conjunction with the language of Sec. 18 (1) (f) of the IB Code, would make it amply clear that only those 'assets', over which the corporate debtor, can exercise right of ownership or dominion, can be held to be within the scope and ambit of the powers of the IRP and not otherwise. 14. As discussed above the Provident Fund of an employee, which includes both the components (a) employee contribution and (b) employers contribution, cannot be held to be 'assets', over which the corporate debtor can be held to have any rights of ownership or dominion and would, even in case it is not deposited in the Provident Fund account, by the employer would continue to be property owned by the employee, held in trust by the employer, on behalf of the employee for being deposited in the provident fund account and thus would be outside the scope and ambit of the duties of the IRP as specified in Sec. 18 of the IB Code. 15. In this context, it is further necessary to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson and includes a 'financial debt' and 'operational debt', the expression 'financial debt', being defined in Sec. 5 (8) to mean a debt along with interest, if any, which is disbursed against the consideration for the time value of money and includes - money borrowed against payment of interest; amount raised by acceptance under any acceptance credit facility; amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; amount of any liability in respect of any lease of hire purchase contract; receivables sold or discounted; amount raised under any transaction including forward sale or purchase agreement, having commercial effect on the borrowing. This would indicate that a 'financial debt', would be in relation to a commercial transaction as indicated in clauses (a) to (f) of Sec. 5 (8) of the IB Code, 'Operational debt', being one as defined in Sec. 5 (21) of the IB Code to be a claim in respect of the provisions of goods or services including employment or a debt in respect of the payment of dues arising under any law for the time being in force and payable to the Central Government, any State Government o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is strictly within the four corners of all the laws, which govern the Corporate Debtor, and does not contravene any of them. If that be so, then even if no claim is raised by the PF Department regarding the outstanding PF Dues, it would be a statutory obligation of the RP, while preparing and submitting the Resolution Plan, to ensure that all provident Fund obligations of the corporate debtor are duly addressed and taken care of in the Resolution Plan. It is also necessary to note that under Sec. 31 (1) only such Resolution Plan as approved by the committee of creditors, which meets the requirements as referred to in sub-section 2 of Sec. 30, which includes Sec. 30 (2) (e), can be approved by the Adjudicating Authority. This is further emphasized by the language of Sec. 31 (2) which enjoins upon the Adjudicating Authority to reject a Resolution Plan, which does not confirm to the requirements referred to in Sec. 31 (1). 19.1. In this context Sec. 10 of the EPF Act assumes significance and needs to be considered, which for the sake of ready reference is quoted as under: "10. Protection against attachment.- (1) The amount standing to the credit of any member in the Fund or of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation to an establishment to which any Scheme or the Insurance Scheme applies in respect of any contribution payable to the Fund or, as the case may be, the Insurance Fund, damages recoverable under section 14B, accumulations required to be transferred under sub-section (2) of section 15 or any charges payable by him under any other provision of this Act or of any provision of the Scheme or the Insurance Scheme; or (b) from the employer in relation to an exempted 2[establishment] in respect of any contribution to the Provident Fund or any Insurance Fund (in so far it relates to exempted employees), under the rules of the Provident Fund or any Insurance Fund, any contribution payable by him towards the Family Pension Fund under sub-section (6) of section 17, damages recoverable under section 14B or any charges payable by him to the appropriate Government under any provision of this Act or under any of the conditions specified under section 17 shall, where the liability thereof has accrued before the order of adjudication or winding up is made, be deemed to be included among the debts which under section 49 of the Presidency-towns Insolvency Act, 1909 (3 of 1909), or under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebtor has deposited the same in terms of Sec. 6 of the EPF Act, in the Provident Fund Account created under Sec. 5 (1) of the EPF Act, which is to be managed by the Board, it can be claimed to be made part of the Resolution Plan and attached for its implementation, which according to us, is an impermissible position in law, considering that the employer, has no right of ownership over such contribution. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed or existing for the benefit of the Transferred Employees of Demerged Undertaking 1, upon the Scheme becoming effective, shall be continued on the same terms and conditions by the Resulting Company 1 and Resulting Company 1 shall stand substituted for all purposes and intents, whatsoever, relating to the administration or operations of such schemes or funds or in relation to the obligation to make contributions to the said funds, in accordance with the provisions of Applicable Laws. It is hereby clarified that upon the Scheme becoming effective, the aforesaid benefits or schemes shall continue to be provided to the Transferred Employees of Demerged Undertaking 1 for such purpose shall be treated as having been continuous. 5.2 Resulting Company 1 agrees that the services of the Transferred Employees of Demerged Undertaking 1 prior to the transfer, shall be taken into account for the purposes of all benefits to which such employees may be eligible, including in relation to the level of remuneration and contractual and statutory benefits, incentive plans, terminal benefits, gratuity plans, provident plans and other retirement benefits and accordingly, shall be reckoned from the da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... employees of the de-merged undertaking No. 2 (taken over by the petitioner No. 3), which is contained in clause 16 (Pg.489) of the Composite Scheme of Arrangement and Amalgamation. Clause 30 (Pg.503) of the Composite Scheme of Arrangement and Amalgamation also contains a similar preposition regarding, clause 30.4 of which provides that the existing provident fund, employees State Insurance Corporation, Superannuation and gratuity fund, staff welfare scheme, employees stock auction plan, incentive if any, of which the employees of the amalgamating company are members of beneficiaries along with the accumulated contribution therein till the effective date shall with the approval of the concerned authorities be administered by the amalgamated company for the benefit of such employees on the same terms and conditions. It also provides that all benefits and schemes being provided to the transferred employees will be treated as having been continuous and uninterrupted for the purpose of the aforesaid scheme and accordingly, the provident fund, etc. of the said employees of the amalgamating company would be continued to be deposited in the transferred provident fund. It would therefore, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... object of the IB Code and has after considering the legal position, has held as under: "102.1. That once a resolution plan is duly approved by the adjudicating authority under sub-section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the corporate debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the adjudicating authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan. 102.2. The 2019 Amendment to Section 31 of the I&B Code is clarificatory and declaratory in nature and therefore will be effective from the date on which the I&B Code has come into effect. 102.3. Consequently all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon severance of his employment. A major portion of the workforce in the Country, depends upon this security and looks forward to it, as a veritable golden pot under the rainbow, entitlement to receive which, is undisputable, as it is his own money. That is the reason why the Legislature, while enacting the IB Code while considering the process of liquidation has kept it out of the purview of being attached and liquidated. As is discussed above, the explanation to Section 18 of the IB Code in Explanation (a), also considers and safeguards that position. 28. Though it is contended by Mr. Bhangde, learned Senior Counsel for the petitioners, that Jet Aircraft (Supra) was a case in which while approving the resolution plan, the question of payment of provident fund of the employees was raised before the IRP, which was rejected and therefore according to him is distinguishable on this point and so also question II framed and considered therein, was in respect of the scope and ambit of Section 36 (4)(b)(iii) of the IB Code, vis-a-vis the provident fund, gratuity and other benefits, it is also necessary to consider, that while considering Section 18(f) of the IB Code, the Tribunal has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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