National Company Law Appellate Tribunal, Chennai: In a case related to approval of Resolution Plan without admitting full claim including provident fund and gratuity dues, a Division Bench comprising of M. Venugopal, J. and Ms. Shreesha Merla* (Technical Member), directed to include both Provident Fund and Gratuity Fund which is to be paid in full in the ‘Resolution Plan’.
Brief Facts
In the instant case, the Adjudicating Authority vide order dated 29-02-2021, approved the Resolution Plan as preferred by the Resolution Professional (RP). The RP vide an email dated 09-02-2021 informed the appellant that his claim was admitted only to the extent of 35.13% of the total admitted claim of Rs. 30,46,31,880/-. Aggrieved by the impugned order dated 29-02-2021, approving the Resolution Plan admitting appellant’s claim to the extent of 35.13%, the appellant preferred the present appeal before the NCLAT challenging the same.
Moot Point
Whether the Provident Fund and Gratuity dues of the appellant are to be paid in full?
Court’s Verdict
While relying on Jet Aircraft Maintenance Engineers Welfare Assn. v. Ashish Chhawchharia, 2022 SCC OnLine NCLAT 418, the NCLAT opined that both Provident Fund and Gratuity Fund is to be paid in full as per the provisions of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and Payment of Gratuity Act, 1972.
“…the share of workmen dues shall be kept outside the Liquidation assets and the concerned workmen / Employees shall have to be paid the same, out of such Provident fund, Gratuity Fund, if any available. The words, ‘if any available’, cannot be read to mean that the workmen and empolyees are not entitled for Provident fund, Gratuity Fund, Pension fund, if not available with the Liquidator.”
The NCLAT allowed the present appeal and directed to include these amounts in the ‘Resolution Plan’.
[Central Board of Trustees v. Shri Kumar Rajan, 2023 SCC OnLine NCLAT 284, order dated 21-06-2023]
*Judgment by Ms. Shreesha Merla (Technical Member)
Advocates who appeared in this case:
Mr. R. Vishnu, Counsel for the Appellant;
Mr. P.V. Vinod, Counsel for the Respondent No. 1.
