Pranav B Prem

The National Company Law Appellate Tribunal (NCLAT), Chennai Bench, comprising Justice Sharad Kumar Sharma (Judicial Member) and Mr. Jatindranath Swain (Technical Member), dismissed the appeals filed by the Employees’ Provident Fund Organisation (EPFO) against the Resolution Professional (RP) and the Successful Resolution Applicant (SRA) of M/s Neueon Towers Limited. The Tribunal held that repeated applications under Section 42 of the Insolvency and Bankruptcy Code (IBC), after adjudication of the same issues, are barred by the doctrine of res judicata and amount to an abuse of process of law.

Also Read: NCLAT Delhi: Section 94 Of IBC Cannot Be Used To Obstruct Recovery Process Under SARFAESI Act

Background

The appeals arose from a dispute relating to provident fund dues claimed by the EPFO against M/s Neueon Towers Limited, a corporate debtor undergoing insolvency proceedings. EPFO had initially filed applications bearing IA Nos. 42/2021 and 236/2021 before the Adjudicating Authority under Section 42 of the IBC, seeking inclusion of its claims, including statutory interest and damages. Those applications were partly allowed by the Adjudicating Authority through orders dated 10.09.2021 and 14.10.2022, which directed the RP and Committee of Creditors (CoC) to admit only the employer’s contribution toward the provident fund, while denying the penal and interest components of the claim.

Despite the adjudication, EPFO subsequently filed another application (IA No. 14/2023) before the Adjudicating Authority, essentially reasserting the same claims. This application was dismissed by the Tribunal, citing that the matter had already been finally decided, and there was no new cause of action to warrant reopening of the issue. The Tribunal found that the SRA had already accounted for the legitimate EPF dues, as per the resolution plan.

NCLAT's Observations and Ruling

Upholding the Adjudicating Authority’s dismissal, the NCLAT ruled that EPFO, being a statutory body, was expected to act fairly and in accordance with law. The Bench observed that EPFO had suppressed the fact of earlier adjudications while filing the fresh application, and that such conduct was a clear attempt to reopen concluded issues under the guise of fresh proceedings.

The Tribunal held that once the matter had been adjudicated on merits, refiling an application on the same subject was hit by the doctrine of res judicata. The NCLAT found no illegality in the dismissal of the EPFO’s subsequent application and criticized the repetitive litigation as “a misuse of the forum” and “abuse of the process of law.” It further emphasized that the SRA, having already taken care of the admitted EPF dues under the approved resolution plan, was not liable for further contributions or statutory dues that had already been disallowed by judicial determination.

The appellate authority concluded that the appeal was devoid of merit and refused to go into the merits of recalculation or reassessment of dues, since those aspects were already settled by earlier orders which had attained finality.

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Verdict

The NCLAT’s judgment reinforces the principle that statutory bodies must exercise their powers responsibly and not indulge in repetitive litigation, especially after issues have been judicially settled. It affirmed that the remedy under Section 42 of the IBC cannot be invoked successively on the same grounds, and that such attempts constitute an abuse of legal process. Accordingly, the appeal filed by EPFO was dismissed.

Appearance

For Appellant:  Mr. MS Viswanathan, Advocate 

For Respondents:         -       

Cause Title: Employees' Provident Fund Organization V. Dr. Madurai Sundaram Sankar & Anr.

Case No: Company Appeal (AT) (CH) (Ins) No. 193/2025

Coram: Justice Sharad Kumar Sharma [Member (Judicial)], Jatindranath Swain [Member (Technical)]

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