# In the matter of Auto Mobiles Sterling (India) Private Limited

> NCLT judgment dated 2023-11-10. Citation: TCN-2023-NCLT-00779. The case involves an application (IA-1642/2021) filed under Section 60(5) of the Insolvency and…

- **Court:** NCLT
- **Order date:** 10 Nov 2023
- **Citation:** TCN-2023-NCLT-00779
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/auto-mobiles-sterling-india-private-limited-800570bd

## Summary

### Background

The case involves an application (IA-1642/2021) filed under Section 60(5) of the Insolvency and Bankruptcy Code (IBC), 2016, seeking the revocation of a lien levied on the bank account of Automobiles Sterling (India) Private Limited (Corporate Debtor) by the Employees' Provident Fund Organisation (EPFO). The lien was based on an order of the EPFO. The CIRP was initiated against the Corporate Debtor via an application under Section 9 of the IBC filed by Adbridge Communications India Private Limited (Operational Creditor), which was admitted on 07.08.2019. A moratorium was declared, and Pankaj Kumar Singhal was appointed as the Interim Resolution Professional. The Committee of Creditors (CoC) decided to liquidate the Corporate Debtor on 30.12.2019, authorizing the

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## Facts

Adbridge Communications India Private Limited initiated CIRP against Automobiles Sterling (India) Private Limited under Section 9 of IBC, which was admitted on 07.08.2019. Pankaj Kumar Singhal was appointed as the Interim Resolution Professional. The CoC decided to liquidate the Corporate Debtor on 30.12.2019. The liquidator discovered a lien imposed by the EPFO on the Corporate Debtor's bank account after the CIRP initiation. The EPFO's lien was based on an order dated 26.11.2019, for an amount of Rs. 4,25,983/-. The liquidator requested the EPFO to revoke the lien, but the EPFO refused, asserting that the dues were statutory. The EPFO submitted a claim for Rs. 4,96,988/-, including a penalty amount. The EPFO argued that the IBC deliberately keeps PF and Pension Fund

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## Issues and analysis

### Issue 1: Whether the lien imposed by the Employees' Provident Fund Organisation (EPFO) on the bank account …

**Ratio:** Section 238 of the IBC states that the provisions of the IBC shall have effect

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**Reasoning:** The court reasoned that the lien was imposed after the initiation of the CIRP, making it

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**Interpretation:** Section 238 of the IBC is interpreted to mean that any action taken under any

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**Application:** In this case, the EPFO's lien was imposed after the CIRP initiation, making it

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## Parties

- **Judges:** BACHU VENKAT…; ATUL CHAT…
- **Appellants:** Davender Kumar,…
- **Respondents:** M/s. Automobiles…; M/s. Indusind…
- **Advocates:** Davender…; Shivanath M…; +1 more

## Timeline

- **2019-08-07 — CIRP Init…**: Application under Section 9 of IBC filed by Adbridge Communications India Private Limited…
- **2019-12-30 — CoC Deci…**: The Committee of Creditors (CoC) decided…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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