In this order Hon’ble NCLT held that PF/Gratuity due of the workers is third party asset belonging to poor worker and this asset need to excluded and to be paid in priority in resolution or liquidation without waiting for distribution under Section 53 of the IBC. Hon’ble Court held in operative part as under.
“The Bench also aware of the provision of Section 36(4)(iii) of I & B Code 2016 which states that the amount deducted for `Provident Fund’, purely belongs to an `Employees’ and is not to be treated as an `Asset’ of the ‘Corporate Debtor’ and cannot be touched by an `Interim Resolution Professional’/`Resolution Professional’/ `Liquidator’ as the case may be.
Therefore, The Bench is of the considered view that claims of the EPFO would not fall part of liquidation estate as provided under section 36(4) of the Code and the EPFO dues would not fall under the waterfall mechanism envisaged under Section 53 of the Code.”