Calcutta High Court (Appellete Side)

Gloster Limited & Anr vs The Recovery Officer on 4 October, 2023

04.10.2023
Item No.23
Court No.550
Saswata
                              W.P.A. 20339 of 2023
                              Gloster Limited & Anr.
                                      Versus
                  The Recovery Officer, Employees Provident Fund
                               Organization & Ors.

                        Mr. Shounak Maitra
                        Mr. Meghnath Dutta
                        Mr. S.Rudra
                                                           ... For the petitioners
                        Mr. S.C.Prasad
                                                         ...For the respondents

1. The present writ application has been filed, inter alia,

questioning the authority of the Recovery Officer under

the Employees Provident Fund and Miscellaneous

Provisions Act, 1952 (hereinafter referred to the said Act)

to pass an order dated 16th May 2023, for recovery of its

dues which dates back prior to approval of the

resolution plan, under the Provisions of Insolvency and

Bankruptcy Code, 2016 (hereinafter referred to the said

Code). It is the petitioners' contention that the petitioner

no. 1 was declared sick, within the meaning of Section

3(o) of the Sick Industrial Companies (Special

Provisions) Act, 1985, on 10th September, 2001.

2. By a notification published by the Ministry of Corporate

Affairs Noti. No. S.O. 3594 (E) dated November 3, 2016,

in the official gazette on the said date and in exercise of

the powers conferred under sub Section (3) of Section 1

of the Code, the Central Government appointed 1st

December 2016, as the date on which the provisions of

the Sections indicated therein, had come into effect.

3. It is the petitioners' contention that the Corporate

Insolvency Resolution process (in short CIRP) was

initiated by an operational creditor in terms of Section 9

of the Code, in connection with the aforesaid CIRP a

resolution plan was submitted by the petitioner no.2

and ultimately, the same was approved by the

adjudicating authority by an order dated 27th

September, 2019, which forms part of the present writ

application.

4. Mr. Maitra, learned advocate appearing in support of the

aforesaid writ application by placing reliance on Section

31 of the Code, submits that unless a creditor makes a

claim and such claim is approved by a resolution plan,

no further claim from such creditor can be accepted.

According to him in terms of Section 31 of the Code, the

aforesaid resolution plan is binding on all and sundry,

including the Central Government, any State

Government or any local authority to whom a debt in

respect of the payment of dues arising under any law for

the time being in force, including such authorities to

whom statutory dues are owed. By drawing attention of

this Court to the resolution plan at page 92 of the writ

application, it is still further submitted that provisions

have been made for payment to the workers in respect

whereof, no claim has been filed. As such, the claims of

the workers are protected.

5. Having regard to the same, he submits that the claim

made by the provident fund authorities cannot be

sustained in as much as the provident fund authorities

having not filed their claim, in terms of Section 31 of the

Code, has no authority in law to raise a demand or to

enforce the same, for the pre-resolution approval plan

period.

6. In support of his contention, he has placed reliance on a

judgment delivered by the Hon'ble Supreme Court in the

case of Ghanashyam Mishra & Sons (P) Ltd. v.

Edelweiss Asset Reconstruction Co. Ltd.1 He submits

that similar view has been taken by the Hon'ble

Supreme Court in the case of Ruchi Soya Industries

Ltd. v. Union of India 2. In any event, he submits that

the petitioner no. 1 is a going concern. In terms of the

resolution plan, as successful applicant the petitioner

no.2 was required to infuse and has infused a sum in

excess of Rs.123.70 crores.

7. Having regard to the aforesaid, it is submitted that the

aforesaid order passed by the Regional Provident Fund

Commissioner, Regional Office Howrah cannot be

sustained and the same should be stayed, pending

hearing of this writ application.

8. Mr. Prasad, learned advocate appearing for the

provident fund authorities, on the other hand submits

that the dues of the provident fund authorities are

statutory dues and are covered by the provisions of the

Employees' Provident Funds and Miscellaneous

Provisions Act, 1952. He submits that whether the

provident fund authorities had applied before the

adjudicating authority or not is a question of fact.

Having regard to the same he prays for leave to file

affidavit in opposition. He, however, submits that at this

2021 9 SCC 657

2022 6 SCC 343

stage no interim order should be passed in favour of the

petitioners.

9. Heard the learned advocates appearing for the respective

parties and considered the materials on record. I find

from the documents on record that the resolution plan

has in fact been approved in favour of the petitioner

no.2, as would appear from the order dated 27th

September 2019, passed by the National Company Law

Tribunal, Kolkata being the adjudicating authority, in

C.P. (IB) No. 61/KB/2018.

10. It is also noticed from Section 31 of the Code that a

resolution plan is binding on all and sundry including

the State Government and other authorities. It is also

noticed that the Hon'ble Supreme Court in the case of

Ghanashyam Mishra and Sons (supra) in paragraph

102.1 to 102.3 has been, inter alia, pleased to observe

as follows:

"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 for the period

prior to the date on which the adjudicating authority grants its approval under Section 31 could be continued."

11. Having regard to the aforesaid, I am of the view that the

petitioners, at this stage, having made out a prima facie

case is entitled to an interim order. However,

considering the balance of convenience and taking into

consideration the fact that the petitioner no. 1 is a going

concern and affidavits are yet to be exchanged, it would

be just and fair while granting an interim relief, to direct

the petitioners to secure a sum of Rs. 62,97,927/- with

the Registrar General of this Court within a period of

four week from the date of this order, and in the

alternative, to deposit with the learned Registrar

General, Fixed Deposit receipts, issued by any