RADHAKRISHNAN DHARMARAJAN Vs. CENTRAL PROVIDENT FUND COMMISSIONER

JUDGEMENT

(1.) The writ petition is filed by the liquidator of a company under liquidation, namely Flora Footwear Pvt. Limited. The writ petition contests the order of the Central Provident Fund Commissioner, Employees Provident Fund Organisation, New Delhi, dtd. 30/5/2025.

(2.) The brief facts leading to the filing of the writ petition are that the company mentioned above, namely Flora Footwear Pvt. Limited was found liable for the contribution payable under the Act, and an order was passed under Sec. 14(A) of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (for brevity, 'EPF & MP Act, 1952'). Additionally, damages amounting to Rs.88,87,860.00 had already been levied against the said company under Sec. 14(B) of the EPF & MP Act, 1952. While so, at the request of the company's operational creditors, insolvency proceedings were initiated under the Insolvency and Bankruptcy Code, 2016 (for brevity, 'IBC, 2016'), and no revival or resolution plan was worked out. By an order dtd. 3/9/2019, the petitioner was appointed as a liquidator, replacing the interim resolution professional, and orders were passed under Sec. 33(1) of IBC, 2016, directing the liquidation of the company in accordance with Chapter III, Part 2 of the IBC, 2016. Under these circumstances, the official liquidator initially submitted a representation on 20/4/2021 seeking a waiver of the damages. It is also stated that the original amount due, including interest, has already been paid to the Provident Fund Organisation. The request was rejected by the Provident Fund Organisation, leading to the filing of W.P. No.18328 of 2022 by the petitioner.

(3.) The learned liquidator, by taking this Court through the impugned order and referencing the relevant provisions of the EPF & MP Act, 1952, and the IBC, 2016, submits that the purpose of the proviso is solely related to the waiver of damages and benefits granted to Sick Companies that are unable to repay the full damages amount. The authority should have considered the proviso with a purposive approach. When the SICA Act was initially in force, the proviso to Sec. 14(B) of the EPF & MP Act referred to the name of the said Act. While it is true that this proviso could be explicitly amended, it can also be observed that, under the provisions of the IBC, specifically Sec. 252, the provisions of the SICA Act, 1985, are deemed to be amended according to the contents of the Eighth Schedule to the IBC. A careful reading of the Repeal Act in the Eighth Schedule shows that references to proceedings under the SICA Act, 1985, are to be deemed abated and instead refer to the IBC, 2016. Therefore, the term "Board For Industrial and Financial Reconstruction (BIFR)" should be read as the "National Company Law Tribunal (NCLT)," and the phrase "Sick Industrial Companies Act (Special Provisions) Act (SICA)" should be read as the "Insolvency Bankruptcy Code, 2016 (IBC)." Consequently, the entire reasoning of the first respondent is legally incorrect, and this Court must interfere with the impugned order.