The National Company Law Appellate Tribunal (NCLAT), New Delhi has ruled in favour of the Employees Provident Fund Organisation (EPFO) on the attachment of property of Sholingur Textiles Limited (a firm under insolvency) for recovery of provident fund dues.
The Chennai Bench of the National Company Law Tribunal (NCLT) had admitted the insolvency petition against Sholingur Textiles filed by Edelweiss Asset Reconstruction Company Ltd.
In August 2017, the EPFO, Vellore, had attached the property of the firm to recover provident fund dues of about ₹53.8 crore.
The resolution professional appointed to oversee the insolvency process, had sought for cancellation of the attachment made by the EPFO, which was allowed by the NCLT. Challenging this the EPFO had moved the NCLAT.
In its order, the NCLAT noted that the EPFO had issued the attachment order on August 4, 2017, while the insolvency petition was admitted on February 4, 2019. Thus it is apparent that the attachment of the immovable property in question had already existed prior to the initiation of insolvency proceedings of Sholingur Textiles, it added.
It is thus clear that the Adjudicating Authority failed to take notice that attachment of the property of the corporate debtor was made much before the initiation of the insolvency process, but it was only recorded in the register during the process, NCLAT said.
The NCLT had passed the order without considering the objections of the Recovery Officer, EPFO, it noted and set aside the order.