EPFO Dues Extinguished After Approval of Resolution Plan? CGIT Delhi's Landmark Ruling in Revent Precision Engineering Case

Introduction

In a significant judgment strengthening the "clean slate" principle under the Insolvency and Bankruptcy Code, 2016 (IBC), the Central Government Industrial Tribunal (CGIT), Delhi, in M/s Revent Precision Engineering Ltd. vs Regional PF Commissioner-II, Gurugram (West), has held that EPFO authorities cannot enforce provident fund demands, damages and interest relating to the pre-CIRP period against a successful resolution applicant when such claims were not lodged during the Corporate Insolvency Resolution Process (CIRP).

The decision, delivered on 02 June 2026, reiterates the supremacy of an approved resolution plan under Section 31 of the IBC and provides much-needed certainty to successful resolution applicants.

Background of the Case

Amtek Auto Limited underwent CIRP under the Insolvency and Bankruptcy Code, 2016 pursuant to proceedings initiated before the National Company Law Tribunal (NCLT).

After completion of the insolvency process, the resolution plan submitted by DVI (subsequently Revent Precision Engineering Limited) was approved by the Adjudicating Authority on 09 July 2020.

Subsequently, the EPFO initiated proceedings under:

• Section 7A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952;
• Section 14B (Damages); and
• Section 7Q (Interest).

The PF authorities assessed:

The demands related to the period from January 2015 to March 2019, i.e., prior to approval of the resolution plan.

Core Legal Issue

The fundamental question before the Tribunal was:

Whether EPFO can determine and recover provident fund dues, damages and interest pertaining to a period prior to CIRP after approval of a resolution plan when no claim was lodged before the Resolution Professional?

Contentions of the Resolution Applicant

The appellant argued that:

1. CIRP was initiated and public announcements inviting claims were issued.
2. EPFO failed to submit its claim before the Resolution Professional.
3. Once the resolution plan was approved under Section 31 of the IBC, all claims not forming part of the resolution plan stood extinguished.
4. The successful resolution applicant acquires the company on a "fresh slate" basis.
5. Post-approval statutory demands for prior periods are impermissible.

The appellant relied upon several landmark Supreme Court judgments including:

• Essar Steel India Ltd.
• Ghanshyam Mishra & Sons Pvt. Ltd.
• Jaypee Kensington Boulevard Apartment Welfare Association
• Other judicial precedents interpreting Section 31 of the IBC.

EPFO's Stand

The EPFO argued that:

• Provident Fund legislation is a beneficial social welfare legislation.
• PF dues enjoy special protection.
• Section 17B of the EPF Act creates joint and several liability in cases of transfer of establishments.
• EPFO dues have priority and cannot be extinguished merely because of approval of a resolution plan.

Tribunal's Findings

1. Approved Resolution Plan is Binding on All Stakeholders

The Tribunal emphasized that Section 31 of the IBC makes an approved resolution plan binding upon:

• Corporate Debtor
• Employees
• Members
• Creditors
• Central Government
• State Government
• Local Authorities
• Other Stakeholders

Accordingly, statutory authorities are also bound by the approved plan.

2. Clean Slate Principle Reaffirmed

Relying upon the Supreme Court's decisions in Essar Steel and Ghanshyam Mishra, the Tribunal reiterated that a successful resolution applicant cannot subsequently be burdened with undisclosed or undecided claims.

The object of the IBC is to ensure revival of distressed businesses and provide certainty to incoming investors.

3. Failure to Lodge Claim During CIRP is Fatal

The Tribunal observed that EPFO had an opportunity to submit its claim before the Resolution Professional but failed to do so.

If statutory authorities do not file claims during CIRP, such claims cannot subsequently be enforced against the successful resolution applicant.

4. Distinction Between Resolution and Liquidation

An important aspect of the judgment is the Tribunal's clarification that provisions relating to liquidation cannot be mechanically applied to a resolution process.

Priority rights available during liquidation do not automatically survive where a resolution plan has already been approved.

Final Decision

The Tribunal set aside and recalled the orders passed under:

• Section 7A
• Section 14B
• Section 7Q

The Tribunal further directed refund of amounts deposited by the appellant together with interest at 10% per annum.

Conclusion

The Revent Precision Engineering ruling is another important addition to the growing jurisprudence supporting finality of approved resolution plans under the Insolvency and Bankruptcy Code. The judgment reinforces the legislative intent that a successful resolution applicant should not be confronted with fresh statutory demands relating to periods preceding CIRP.

The author can also be reached at jayvadher05@gmail.com

Disclaimer: The views expressed are personal and intended solely for academic and professional discussion. Readers are advised to refer to the complete judgment and obtain professional advice before acting on any matter discussed herein.