# In the matter of Shirt Company (India) Pvt. Limited I.A. 2229 of 2022 in C.P.(IB) No. 2534 of 2019

> NCLT judgment dated 2023-06-30. Citation: TCN-2023-NCLT-02743. The case involves an application filed by the Liquidator of Shirt Company (India) Private…

- **Court:** NCLT
- **Order date:** 30 Jun 2023
- **Citation:** TCN-2023-NCLT-02743
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shirt-company-india-pvt-limited-ia-2229-of-2022-in-cpib-no-2534-of-2019-179ae849

## Summary

### Background

The case involves an application filed by the Liquidator of Shirt Company (India) Private Limited, Mr. Anuj Bajpai, under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, seeking reliefs related to the claims of the Employees' Provident Fund Organisation (EPFO). The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor on 26.02.2020. The EPFO filed a claim during CIRP, which was admitted. Subsequently, the Committee of Creditors resolved to initiate liquidation. The EPFO initiated recovery proceedings against the Corporate Debtor for its dues, leading to the present application by the Liquidator.

## Facts

The Corporate Insolvency Resolution Process (CIRP) was initiated against Shirt Company (India) Private Limited on 26.02.2020. During the CIRP, the Employee Provident Fund Organisation (EPFO) filed a claim of Rs. 1,24,86,750/- which was admitted by the Interim Resolution Professional (IRP). Subsequently, the Committee of Creditors resolved to initiate liquidation. The EPFO initiated recovery proceedings under the EPF & MP Act, 1952, attaching the assets of the Corporate Debtor. The Liquidator, Mr. Anuj Bajpai, filed an application seeking to restrain the EPFO from continuing recovery proceedings and to lift the attachment, arguing that the EPFO's claims should be treated under the waterfall mechanism as per Section 53 of the Insolvency and Bankruptcy Code (IBC). The

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## Issues and analysis

### Issue 1: Whether the claims of the Employees' Provident Fund Organisation (EPFO) should be treated under the …

**Ratio:** The amount deducted for Provident Fund purely belongs to the employees and is not to be

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**Reasoning:** The Tribunal considered the provisions of Section 36(4)(iii) of the I&B Code, which

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**Interpretation:** Section 36(4)(iii) of the IBC is interpreted to mean that Provident Fund dues

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**Application:** Since the Liquidator had already created a Fixed Deposit for the amount claimed

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## Parties

- **Judges:** Kuldip Kumar…; Prabhat…
- **Appellants:** Anuj Ba…
- **Respondents:** Shirt Company…; Employee Provident…

## Timeline

- **2020-02-26 — Initiation…**: Company Petition admitted under Section 9 of the Code, initiating Corporate Insolvency…
- **2020-06-30 — Claim by Respondent No.…**: Respondent No. 1 filed its claim before the IRP under “Form B” claiming an amount of Rs.…

## 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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