NCLAT Affirmed NCLT’s Decision Stating the Appellant’s Delayed Claim Couldn’t Survive After the Resolution Plan Approval

Case Details: Employees Provident Fund Organization v. Fanendra Harakchand Munot - [2023] 157 taxmann.com 414 (SC)

Judiciary and Counsel Details

• • Sanjiv Khanna & S.V.N. Bhatti, JJ.
  • Kumar Prashant, Avnish Dave, Vaibhav Dwivedi, Advs. & Archana Pathak Dave, AOR. for the Appellant.
  • Justice Ashok Bhushan, Chairperson & Barun Mitra, Technical Member
  • Anju Jain & Hitesh Sachar, Advs. for the Appellant.

Facts of the Case

In the instant case, the CIRP was initiated against corporate debtor and a public announcement was made. The Committee of Creditors (CoC) considered resolution plan and, same was approved by NCLT.

However, claim filed by appellant was not considered due to inordinate delay in filing claim by appellant. Thereafter, appellant filed an application before NCLT however, said application was rejected by NCLT holding that resolution plan had been approved and, thus no claim could survive.

Consequently, the Appellant filed an appeal before NCLAT against NCLT’s order by which NCLT had dismissed the appellant’s application – NCLAT by impugned order, upheld NCLT’s order on ground that there was no error in NCLT’s order rejecting appellant’s application.

Subsequently, the Appellant challenged NCLAT’s order before Supreme Court. The Supreme Court observed that Commissioner and employees of EPFO had to take steps to ensure that there was compliance with timelines provided under IBC Code, 2016 and failure could have legal consequences.

Further, it was also observed that employees of EPFO were aware of the consequences in order to ensure compliance. Since there was dereliction of duty, action should be taken against erring employees in accordance with law.

Supreme Court Held

The Supreme Court held that the impugned order did not, in any way, affect rights of EPFO to proceed in accordance with law, in view of section 36(4)(a) (iii) of the Insolvency and Bankruptcy Code, 2016. There was no ground to interfere with conclusion reached in impugned order and hence, instant appeal was to be dismissed.