EPFO Cannot Rely On Enforcement Report Prepared During Moratorium To Raise Claim: NCLAT New Delhi

The New Delhi National Company Law Appellate Tribunal (NCLAT) on 28 April held that claims based on an Area Enforcement Officer's Report (AEOR) prepared during the moratorium under the Insolvency and Bankruptcy Code, 2016 (IBC) cannot be admitted in insolvency proceedings unless the underlying statutory assessment has been crystallised.

A Bench comprising Chairperson Justice Ashok Bhushan and Technical Member Indevar Pandey dismissed an appeal filed by the Employees' Provident Fund Organisation (EPFO), affirming the order of the National Company Law Tribunal (NCLT), Mumbai Bench rejecting EPFO's claim. It held:

“Thus, after the liquidation, it is open for EPFO to carry on the assessment. Section 33(5), cannot be held to apply on assessment proceedings. However, while looking at the expression used in Section 14(1), assessment proceedings before the EPFO, cannot be continued after initiation of CIRP.”

The appeal arose from an order dated 24 July 2025 passed by the NCLT, Mumbai Bench, which had rejected EPFO's claim under Sections 7A, 7Q and 14B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The EPFO had submitted its claim with a delay of around nine months and relied on an AEOR prepared during the Corporate Insolvency Resolution Process (CIRP).

The CIRP in the present case had commenced on 19 December 2023, whereas the AEOR forming the basis of the claim was prepared on 22 August 2024, i.e., during the moratorium period. The EPFO contended that provident fund dues constitute third-party assets held in fiduciary capacity by the corporate debtor and therefore must be admitted notwithstanding delay.

The Appellate Tribunal rejected this contention, noting that no determination order under Section 7A of the EPF Act had been passed. It held that in the absence of such statutory determination, the claim remained uncrystallised and could not be admitted in insolvency proceedings.

It further observed that since the AEOR itself was prepared during the CIRP period, it could not form the basis of a valid claim under the IBC framework. The Tribunal reiterated that Section 14 of the IBC places a broad bar on continuation of proceedings during moratorium, including assessment proceedings which are yet to culminate in a determination.

Relying on the decision in Harry Dhaul v. NCLT Mumbai, the Tribunal reaffirmed that claims based solely on AEORs, which are distinct from statutory determinations under Section 7A, cannot be sustained when the report itself is generated during the moratorium period.

Accordingly, the NCLAT dismissed the appeal.

For Appellant: Mr. Kaushal Gautam, Advocate.