# In the matter of Kanakadhara Ventures Private Limited

> NCLT judgment dated 2024-02-26. Citation: TCN-2024-NCLT-02387. The Employees' Provident Fund Organisation (EPFO) filed an application against the liquidator…

- **Court:** NCLT
- **Order date:** 26 Feb 2024
- **Citation:** TCN-2024-NCLT-02387
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/kanakadhara-ventures-private-limited-1d47ca9d

## Summary

### Background

The Employees' Provident Fund Organisation (EPFO) filed an application against the liquidator of Kanakadhara Ventures Private Limited, seeking to set aside the liquidator's rejection of their claim for provident fund dues of the workers. The EPFO argued that provident fund dues should be prioritized over other debts and not be subject to the waterfall mechanism under Section 53 of the Insolvency and Bankruptcy Code (IBC), 2016. The liquidator contended that there was no separate fund created by the Corporate Debtor towards EPF dues and hence the EPFO claim will fall under section 53(1)(e).

## Facts

Employees' Provident Fund Organisation (EPFO) filed an application against Kanakadhara Ventures Private Limited, which is undergoing liquidation. The EPFO sought to set aside the liquidator's rejection of their claim for provident fund dues of the workers. The EPFO argued that provident fund dues should be prioritized over other debts and not be subject to the waterfall mechanism under Section 53 of the Insolvency and Bankruptcy Code (IBC), 2016. The liquidator rejected the claim, stating that there was no separate fund created by the Corporate Debtor towards EPF dues and hence the EPFO claim will fall under section 53(1)(e). The EPFO claimed Rs. 4,71,19,228.00, including short remittance of PF and other charges, damages, and interest. The liquidator admitted the PF

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## Issues and analysis

### Issue 1: Whether prayers sought by applicant are maintainable and thus Tribunal's interference is warranted …

**Ratio:** The Hon'ble Supreme Court has made it very clear that overriding preferential payments to

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**Reasoning:** The tribunal found that the liquidator's email did not advise about rejection of the

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**Interpretation:** The interpretation of Section 53 of the IBC and its applicability to EPFO dues

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**Application:** The tribunal applied the Supreme Court's ruling and determined that the

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Employees…
- **Respondents:** Kanakadhara…

## Timeline

- **2022-07-29 — Liquidator'…**: The liquidator sent an email providing clarifications about the EPFO's claim, but not…
- **2022-07-22 — EPFO Let…**: The applicant wrote a letter seeking…

## 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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