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EPFO cannot issue orders prohibiting and restraining Secured Creditor from utilising the amount paid by Liquidator to Secured Creditor from sale proceeds of properties of the Corporate Debtor – Tamilnad Mercantile Bank Ltd. v. Recovery Officer, The Regional Commissioner-II, Employees’ Provident Fund Organisation – Madras High Court

In this case, the Liquidator released money to Bank towards its share for the credit of the loan account. This was from the sale proceeds of the properties sold.
In the meanwhile, EPFO issued proceedings by invoking Section 8(B) of the EPF and MP Act prohibiting and restraining the Bank from making payments of the said deposit or any part thereof, to any person, whomsoever or otherwise than to the EPFO.

Hon’ble High Court of Madras held that:
(i) Section 53(1) of the IBC, 2016 shall not be applicable to dues governed by Section 36(4) of IBC 2016, which are to be treated outside the liquidation process and liquidation estate assets under the IB Code.
(ii) IB Code which stipulates that the IRP should obtain and review Income Tax and other statutory notices and obtain details of the financial institutions that are maintaining accounts of the CD and inform them of commencement of CIRP of the CD and appointment of IRP.
(iii) The IRP should also immediately give instructions for stopping payment from the account without the authority of the IRP and also change the details of the signatories of the accounts so as to take control of the account. In fact, it is recommended that where required, a new account may be opened.
(iv) In such circumstances, the prohibitory orders or attachment order being sent to the Bank appears out of the rule book. This is not a case where the defaulter is not under liquidation initiated by the IBC. This is also a case where the Bank intimated of the dues.
(v) The orders of the EPFO on the hapless Bank Management is erroneous. The impugned orders of the EPFO are quashed.

EPFO cannot issue orders prohibiting and restraining Secured Creditor from utilising the amount paid by Liquidator to Secured Creditor from sale proceeds of properties of the Corporate Debtor – Tamilnad Mercantile Bank Ltd. v. Recovery Officer, The Regional Commissioner-II, Employees’ Provident Fund Organisation – Madras High Court Read Post »

There is no obligation on the part of Taxation Department to lodge a claim in respect of statutory dues, which have been intimated to the corporate debtor and the said claim is also to be treated as a debt owed to a secured creditor under Section 53(1)(b)(ii) of IBC – Excise and Taxation Commissioner Vs. Hitesh Goel, Liquidator for Anandtex International Pvt. Ltd. – NCLT Chandigarh Bench

The Adjudicating Authority referred decision of the Hon’ble Supreme Court in State Tax Officer (1) Vs. Rainbow Papers Limited (2022) ibclaw.in 107 SC and held that there is no obligation on the part of the Taxation Department to lodge a claim in respect of such statutory dues, which have been intimated to the corporate debtor. The said claim is also to be treated as a debt owed to a secured creditor under Section 53(1)(b)(ii) as security interest has been created by operation of law.

There is no obligation on the part of Taxation Department to lodge a claim in respect of statutory dues, which have been intimated to the corporate debtor and the said claim is also to be treated as a debt owed to a secured creditor under Section 53(1)(b)(ii) of IBC – Excise and Taxation Commissioner Vs. Hitesh Goel, Liquidator for Anandtex International Pvt. Ltd. – NCLT Chandigarh Bench Read Post »

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