Claims Of EPFO Based On Inspection Conducted During CIRP Are Unenforceable: NCLAT

The present three appeals have been filed against orders passed by National Company Law Tribunal (NCLT) by which it dismissed applications filed by both the Resolution Professional and Employees Provident Fund Organisation (EPFO).

The RP submitted that 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.

The EPFO submitted that Direction of the Adjudicating Authority to the EPFO to give the name of employees and detail computation is uncalled for and beyond the jurisdiction. The EPFO had also jurisdiction to submit a claim on the basis of inspection report dated 10.05.2023.

The Tribunal observed 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.

It further held that 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, there is no ground on which the application which was filed by EPFO can be allowed where direction was sought to allow the entire claim of Rs.1,37,17,837/-.

It concluded that “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.”

Accordingly, the appeal of the RP was allowed and the impugned order was set aside.

Case Title: CA Pankaj Shah Versus Employee Provident Fund Organisation & Anr.

Case Number:Company Appeal (AT) (Insolvency) No. 17 of 2025 & I.A. No. 77 of 2025

Judgment Date: 03/09/2025