The National Company Law Tribunal (NCLT), Hyderabad Bench, has ruled that assessment orders passed by the Employees’ Provident Fund Organisation (EPFO) during the moratorium period under the Insolvency and Bankruptcy Code, 2016 (IBC) are legally unenforceable. The proceedings violate the statutory bar imposed during the Corporate Insolvency Resolution Process (CIRP).
The Bench of Rajeev Bhardwaj (Judicial Member) and Sanjay Puri (Technical Member) held that once CIRP is initiated, Section 14 of the IBC bars the initiation or continuation of proceedings against the corporate debtor. The moratorium aims to preserve the assets of the debtor and ensure an orderly insolvency process.
The insolvency proceedings against the corporate debtor were initiated by State Bank of India under Section 7 of the IBC. The NCLT admitted the petition on 24 April 2023, thereby commencing the CIRP and imposing a moratorium under Section 14 of the Code.
During the process, Anshul Gupta was appointed as the Interim Resolution Professional and later confirmed as the Resolution Professional. Subsequently, the Tribunal ordered liquidation of the company on 6 December 2024, appointing Ms. Mano Ranjani as the liquidator.
Despite the moratorium, the Assistant Provident Fund Commissioner proceeded to issue an assessment order under Section 7A of the EPF Act on 26 July 2023, determining provident fund dues. A review application filed thereafter was rejected through an order dated 6 March 2024 under Section 7B of the EPF Act.
The provident fund liability alleged by EPFO pertained to contract labour engaged through IWs Simplex Infrastructures Ltd., an independent establishment with its own EPF registration and compliance obligations. According to the liquidator, the contractor had already remitted provident fund contributions for the relevant period, a fact confirmed by EPFO’s Kolkata office with supporting records.
During CIRP and subsequent liquidation, EPFO lodged claims of approximately ₹59.61 crore based on the impugned assessment orders. However, the Resolution Professional rejected these claims, citing two key grounds: The assessment orders were passed during the moratorium period in violation of Section 14 of the IBC. The alleged dues related to employees of an independent contractor and not to employees of the corporate debtor.
The Tribunal also noted that EPFO did not challenge the rejection of its claim through the statutory remedy available under Section 42 of the IBC.
Referring to judicial precedents, including the Supreme Court’s ruling in ABG Shipyard Liquidator v. Central Board of Indirect Taxes & Customs, the Tribunal observed that the moratorium acts as a statutory embargo on adjudicatory or coercive proceedings that may affect the debtor’s financial position.
Since the EPFO assessment and review orders were issued after the commencement of CIRP, the Tribunal concluded that they were in violation of the moratorium and therefore lacked legal enforceability.
Allowing the liquidator’s application, the NCLT declared that the EPFO orders dated 26 July 2023 and 6 March 2024, passed under Sections 7A and 7B of the EPF Act during the moratorium period, are “non-est in law and unenforceable against the corporate debtor.”
Case Details
Case Title: SBI Versus Gati Infrastructure Bhasmey Power Private Ltd
Citation: JURISHOUR-358-NCLT-2026(HYD)
Case No.: CP(IB) No. 203/7/HDB/2022
Date: 12-03-2026
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