In a landmark decision with significant implications for insolvency practitioners, resolution applicants, and employee stakeholders, the Bombay High Court (Nagpur Bench) in Dalmia Cement (Bharat) Limited & Ors. v. Central Board of Trustees, EPFO & Ors. (WP No. 693/2022, decided on April 29, 2025), has ruled that dues payable to the Employees’ Provident Fund Organisation (EPFO) cannot be extinguished merely because they were not verified or included in an approved resolution plan under the Insolvency and Bankruptcy Code, 2016 (IBC).
The Dispute in Focus
During the CIRP of Murli Industries Ltd., the EPFO submitted an initial claim for ₹54.98 lakh but did not follow up with the mandatory documentation required under the IBC regulations for claim verification. Consequently, the Resolution Professional (RP) recorded a “nil” claim for PF dues. The resolution plan submitted by Dalmia Cement (Bharat) Limited was thereafter approved by the Committee of Creditors, the NCLT, and upheld by the NCLAT and the Supreme Court. Subsequently, the EPFO issued demand notices to recover statutory dues exceeding ₹25 crore under Section 7A of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, triggering the writ petition.