Claim At Fag End Of Liquidation Not Allowed: NCLT Kochi Rejects EPFO Plea In Trivandrum International CIRP

The National Company Law Tribunal (NCLT) at Kochi has recently held that a statutory authority cannot raise fresh claims at the fag end of a liquidation process, observing that the insolvency framework does not permit reopening concluded claims after earlier dues have already been admitted and paid.

Judicial Member Vinay Goel dismissed an appeal filed by the Regional Provident Fund Commissioner II, EPFO, which sought condonation of delay in filing an additional claim in the liquidation of Trivandrum International Health Services Limited.

The tribunal observed, “The liquidation process cannot be kept open-ended by permitting fresh assessments or determinations at a belated stage, particularly after commencement of liquidation.”

It further held, “The scheme of the Insolvency and Bankruptcy Code, 2016, clearly contemplates that a creditor must file a comprehensive claim covering all dues as on the insolvency commencement date, and the process cannot be carried out in a fragmented manner by permitting successive claims at different stages.”

The tribunal noted that the additional claim for about 2.81 crore rupees towards interest and damages was raised long after liquidation had progressed and after the earlier claim of the provident fund authority had already been admitted and satisfied. Referring to the stage at which the demand was made, the bench said that a claim raised at the fag end of the liquidation process cannot be allowed as it would unsettle the finality of proceedings.

The insolvency proceedings began when Dhanalaxmi Bank initiated action against Trivandrum International Health Services Limited, which was admitted into the corporate insolvency resolution process in February 2020. As no resolution plan was approved within the prescribed period, the company was ordered to be liquidated in June 2022.

During liquidation, the provident fund authority submitted a claim of about 75.30 lakh rupees, which was verified and admitted in full by the liquidator. Contributions relating to employees retained during the insolvency period and a later shortfall were also paid, and in total about 1.45 crore rupees was remitted to the authority.

In August 2025, the authority sought to submit a fresh claim of about 2.81 crore rupees towards interest and damages for the period March 2016 to May 2022, which the liquidator rejected as time barred and not maintainable.

The provident fund authority argued that the delay occurred because of administrative difficulties, verification of records, and restricted functioning during the Covid period, and submitted that the dues were statutory in nature and should be included even at a later stage. The liquidator opposed the plea, stating that the authority had already filed a claim earlier, that the entire admitted amount had been paid, and that the new demand was based on assessments made long after liquidation had begun.

It was also pointed out that the business of the corporate debtor had already been sold as a going concern and that distribution to creditors had taken place.

Rejecting the appeal, the tribunal held that once a claim has been admitted and satisfied, a creditor cannot later seek to add new components arising from the same period.

The bench observed, “The subsequent claim dated 06.08.2025 for Rs. 2,81,71,007 towards interest and damages, raised at the fag end of the liquidation process and well beyond the prescribed timelines, amounts to an attempt to reopen concluded issues. Permitting such a fresh claim after full satisfaction of the earlier admitted claim would unsettle the finality of the liquidation proceedings and defeat the time-bound framework envisaged under the Code.”

The tribunal also noted that the corporate debtor had already been sold as a going concern and held that the claim could not be entertained at such a belated stage. Calling the appeal a misuse of the process, the bench observed that the department had pursued the matter despite settled legal position and remarked that the appeal was “nothing but a sheer misuse of the process of law.”

The tribunal dismissed the appeal and imposed a cost of 5 thousand rupees to be deposited with the National Defence Fund within seven days.

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