Employees' Provident Fund Organization vs Dr. Madurai Sundaram Sankar & Anr.

Oral Judgement: Justice Sharad Kumar Sharma, Member (Judicial):

The Appellant is a creation of statute and a statutory organization and it is expected in all fairness, that being statutory organization, they owe a responsibility to be fair to the Tribunals or the Courts, while drawing or participating in the proceedings or while pursuing the same and they cannot be permitted to abuse the process of law by recurringly initiating the proceedings either under same provisions or for the same cause of action.

The challenge by the Appellant in the instant Company Appeal, is to the impugned order dated 29.01.2025, as it has been passed in IA No. 2245/2024, wherein, the Appellant has respectively modulated the following reliefs by invocation of provisions contained under Section 42 of I&B Code. The reliefs were “to direct the Respondent/Resolution Professional to except the claim of this applicant of Rs. 10,06,594/- along with the claim by condoning the delay of …days.”

In the connected IA No. 2246/2024, yet again there was an invocation of the provisions contained under Section 42 praying for “to direct the Resolution Professional to accept the claim of the Appellant of Rs. 41,87,527/-, along with the claim by condoning the delay of …days.” The said Interlocutory Application has been rejected by the impugned order on the ground that the issue with regards to the claim or relief as raised by the Appellant, had already been made a subject matter at the behest of the Appellant himself in earlier IA No. 42/2021, as preferred in CP(IB) No. 679/7/HDB/2018, which stood adjudicated by a judgement rendered on 02.09.2021. In those proceedings, the Appellant had sought for a direction against the Respondent to accept the claim of the Employees Provident Fund officer, and for a direction against the Committee of Creditors(CoC) the Corporate Debtor to accept the claim in Form-B, which was rejected by them, with the following observations: -

There was yet an another proceedings which was drawn by the Appellant by filing an IA(IBC) No. 236/2021, in CP(IB) No. 679/7/HDB/2018, by invoking the provisions contained under Section 38, 42, 60(5) of the I&B Code, to be read with Rule 11 of the NCLT Rules.

In the instant case, the Applicant had instituted the application IA No. 2246/2024 before the Learned Adjudicating Authority, in August, 2024, where he had prayed for seeking a direction to the Resolution Professional, to accept the claim based on the records, after condoning the delay, which has chanced in preferring the Appeal.

The said application, IA No. 2246/2024, was preferred by invoking the provisions contained under Section 42 of I&B Code, to be read with Section 60(5). The same has been rejected by the Tribunal on the ground that recurring applications for the same cause of action would not be maintainable, owing to the fact that, earlier similar applications for same relief have already been decided, that the relief sought in IA No. 2246/2024, preferred under Section 38, 42 to be read with Section 60(5) of the I&B Code, and has already been decided by way of IA No. (IBC) 236/2021, and therefore IA No. 2246/2024, would be barred by the principles of res judicata, apart from the fact that in addition to the fact that there was a material concealment and therefore, since, the earlier application already stood decided the subsequent application as preferred being IA No. 2246/2024, would not be maintainable. Thus, the finding recorded in the impugned order does not at all suffer from any apparent error of law or facts.

The Appellant in the Interlocutory Application, has modulated the relief to the effect that a direction may be issued to the Respondent to consider and admit the claim of the Applicant against the Corporate Debtor to the tune of Rs. 5,40,715/-. The said application was closed by the order passed by the Tribunal on 02.09.2021. The observations made therein while closing the said application is extracted hereunder: -

The applicant was facing the hurdle on these two subsisting orders which had attained finality and where his claims have been rejected and even the proceedings drawn under Section 42 has been closed against him. It was rather a 3^rd recurring set of applications, being IA No. 2245/2024 and IA No. 2246/2024, which was preferred by the Appellant for the same relief, which has been rejected by the impugned order on the ground, whereby the Tribunal has observed while considering the rival contentions that, the relief sought for by recurring resorting to the proceedings under Section 42, may not be a scope, which is available to the appellant because, it will amount to be an abuse of process of law. At the stage, when the Appellant has preferred IA No. 2245/2024, on 30.08.2024, the issue qua his relief under Section 42 of I & B Code, had already stood closed, in view of the preceding orders, as already passed earlier and observed above. In the finding which has been recorded by the Learned Tribunal, it rather shows that recurring resort to the judicial proceedings for the same cause of action, under Section 42 would be an abuse of process and that cannot be permitted to be perpetuated by filing the recurring applications and the observation in that regard has been made in Para 11 & 12 of the Impugned Order which is extracted hereunder: -

Therein, the Tribunal has observed that since the issue pertaining to the claim, and the issue pertaining to the proceedings under Section 42, has already been laid to rest by the earlier orders at the behest of the Appellant, he cannot be permitted to abuse the process of law by filing a fresh application under an akin provision for the same cause, which has already been decided against him.

Because the rights of the applicant in the application under Section 42, has been closed by the orders passed by the Tribunal under on 02.09.2021, the same cannot be permitted to be perpetuated and reagitated by filing the instant Company Appeal.

Exclusively, on that ground only, this Appellate Tribunal is refraining to make any observations pertaining to the arithmetical calculations attempted to be pressed by appellant with regard to the claim, which the Appellant expected to have been awarded by the Tribunal, because the arithmetic calculations of the claim would not allure us, as that would be a chapter which stands closed by the decision rendered on earlier application being, IA No. 42/2021 and IA No. 236/2021 and the same cannot be permitted to be reopened to be argued by preferring the application in IA No. 2245/2024, on 30.08.2024. The proceedings drawn by virtue of an appeal, since it only reflects an apparent abuse of process of law. This Appellate Tribunal is not inclined to interfere in these Appeals. The Company Appeals would stand dismissed. However, with no orders as to cost.