More Stories

Informist, Thursday, Sept. 18, 2025

 

NEW DELHI – The National Company Law Appellate Tribunal on Thursday ruled that the claim of Employment Provident Fund Organisation can't be entertained in the Insolvency and Bankruptcy Code, 2016 if it arose out of proceedings which were prohibited under moratorium. "...it is unequivocally clear that demand made by the EPFO on the basis of an inspection report made after initiation of moratorium is not enforceable as Section 14(1) of the IBC prohibits the initiation or continuation of assessment during the moratorium period," said the appellate tribunal.

 

The appellate tribunal said that the successful resolution applicant of Global Energy Pvt. Ltd. has successfully made out a case that the claim of Employment Provident Fund Organisation is clearly unenforceable, having been based on area enforcement officer's report, which had commenced after the initiation of moratorium. Hence, the order passed by the National Company Law Tribunal allowing the principal claim and "tentative dues" of the organisation cannot be sustained, the appellate tribunal added.

 

Merely because the successful resolution applicant had given an affidavit undertaking to pay these claims, this undertaking does not render the claim valid as it violates the law enshrined in Section 14(1) of the 2016 Code. Any undertaking given which is repugnant to statutory provisions are invalid and, therefore, such undertakings are inherently unenforceable, said the appellate tribunal.

 

In 2019, the National Company Law Tribunal had admitted Global Energy Pvt. Ltd. into insolvency and started a moratorium against it. In 2023, the organisation submitted its claim for the first time based on the area enforcement officer's report, which was rejected by the resolution professional of the debt-ridden company. However, the National Company Law Tribunal admitted the belated and untenable claims of the organisation, said the successful resolution applicant. The claim arose from an assessment process which commenced on Feb. 6, 2023 and culminated on Mar. 1, 2023, said the applicant.  End

 

Reported by Surya Tripathi

Edited by Deepshikha Bhardwaj

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.