Ia 1005/CN/2022 of Employees State Insurance Corporation v. Sri Lakshmi Srinivasa Jute Mills Pvt. Ltd.
Case brief
What is this about?
The National Company Law Appellate Tribunal considered whether unpaid statutory ESI contributions due from a corporate debtor were ordinary operational debts or amounts held in trust for employees and therefore excluded from the liquidation estate. Following its earlier decisions, the Tribunal held that Form B filing did not change the contributions’ substantive character. It set aside the NCLT order to the extent that the resolution plan treated the entire ESI claim as government and operational dues and allowed only 1% payment.
What did the court decide?
The NCLT order was set aside insofar as it approved treatment of the ESIC claim as ordinary government/operational creditor dues and provided for payment of only 1% thereof. The Resolution Professional and Successful Resolution Applicant must give effect to the exclusion under Section 40(4) of the ESI Act read with Section 36(4)(a)(i) of the IBC, determining the qualifying amount from statutory re