# In the matter of Regional Provident Fund Commissioner Vs. T.V Balasubramanian CA(AT)(Ins)No. 1521 of 2019

> NCLAT judgment dated 2020-06-08. Citation: TCN-2020-NCLAT-00233. The case involves an appeal against an order passed by the Adjudicating Authority, Chennai…

- **Court:** NCLAT
- **Order date:** 8 Jun 2020
- **Citation:** TCN-2020-NCLAT-00233
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/regional-provident-fund-commissioner-vs-tv-balasubramanian-ca-051a928c

## Summary

### Background

The case involves an appeal against an order passed by the Adjudicating Authority, Chennai Bench, concerning MA No. 830 of 2019 in Company Petition No. CP/1037/(I.B.)/2018. The Financial Creditor, Edelweiss Asset Reconstruction Company Ltd, initiated a company petition under Section 7 of the IBC. The Adjudicating Authority admitted the petition and appointed a Resolution Professional, who then filed MA No.830/2019 to cancel the encumbrance created by an order of attachment registered by the EPFO Vellore. The Corporate Debtor also filed MA No. 830 of 2019 to cancel the encumbrance. The EPFO filed its reply, but the Adjudicating Authority disposed of the application without considering the EPFO's reply.

## Facts

The Financial Creditor, Edelweiss Asset Reconstruction Company Ltd, initiated CIRP against Sholingur Textiles Limited by filing a petition under Section 7 of the IBC. The Adjudicating Authority admitted the petition and appointed a Resolution Professional. The EPFO (Regional Provident Fund Commissioner) had attached the immovable properties of Sholingur Textiles Limited before the CIRP initiation to recover outstanding dues, issuing an attachment order on August 4, 2017. The Recovery Officer also sent a letter to the Sub Registrar on May 10, 2018, requesting the encumbrance of the properties in the name of EPFO. The Adjudicating Authority, however, passed an order to cancel the encumbrance created by the EPFO's attachment, without considering the EPFO's reply. The

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was justified in passing an order to cancel the encumbrance …

**Ratio:** The principles of natural justice require that all parties be given a fair opportunity to

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**Reasoning:** The Adjudicating Authority disposed of the application to cancel the encumbrance without

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**Interpretation:** The Adjudicating Authority's decision was flawed because it did not adhere to

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**Application:** The Adjudicating Authority's failure to consider the EPFO's reply directly

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## Parties

- **Judges:** Venugop…; V. P. S…; +1 more
- **Appellants:** Regional Provident…
- **Respondents:** Sholingur…; T.V. Balasubramani…
- **Advocates:** Mr Manish…; Ms Namitha…; +1 more

## Timeline

- **2017-08-04 — Attachment Orde…**: EPFO issued an attachment order for the immovable properties of Sholingur Textiles…
- **2018-05-10 — Reminder to Sub…**: Recovery Officer sent a letter to the Sub Registrar requesting the encumbrance of the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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