Writ jurisdiction cannot interfere with provident-fund claims pending adjudication in insolvency proceedings.

The petitioners, representing officers and supervisors of the erstwhile Cachar Paper Mill of Hindustan Paper Corporation Limited, sought a direction to the Union of India to deposit and disburse outstanding provident-fund dues under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.

An earlier writ petition seeking substantially the same relief, WP(C) No. 6330/2019, had been closed on 9 February 2024 because Hindustan Paper Corporation was under liquidation and the provident-fund authorities were examining the non-payment of statutory dues.

The Employees’ Provident Fund Organisation stated that it had lodged claims before the Liquidator appointed pursuant to the NCLT’s order dated 14 May 2019, with the total claim for the entire Hindustan Paper Corporation amounting to ₹386.48 crores.

The Liquidator stated that ₹213,18,14,728 had already been paid to the EPFO, and that substantial further amounts had been disbursed towards salary, salary arrears and employee dues, aggregating to ₹651,83,73,260.

The petitioners’ surviving grievance concerned additional provident-fund amounts claimed by the EPFO but not yet disbursed by the Liquidator.

The issue was pending adjudication before the NCLAT, New Delhi.

Whether the Gauhati High Court should issue a writ directing payment of further provident-fund dues when the claims were pending before the Liquidator and the insolvency proceedings were pending before the NCLT/NCLAT.

Whether entertaining the writ petition would impermissibly interfere with proceedings governed by the Insolvency and Bankruptcy Code, 2016.

The Court applied the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, under which provident-fund dues constitute statutory employee claims, and recognised that such claims had been lodged by the EPFO before the Liquidator.

It further applied the distribution framework under Section 53 of the Insolvency and Bankruptcy Code, 2016, governing payment and priority of claims in liquidation proceedings.

The Court held that where the disputed dues were subject to adjudication in proceedings before the NCLT/NCLAT, the High Court ought not to exercise writ jurisdiction in a manner that interferes with the insolvency process.

The Court found that the petitioners’ grievance was no longer about complete inaction by the authorities, since substantial amounts had already been paid to the EPFO and employees.

The remaining dispute concerned the additional provident-fund claim and its disbursement by the Liquidator.

Because that issue was pending within the insolvency framework before the NCLT/NCLAT, any direction by the High Court regarding payment or priority of the claim could interfere with the statutory liquidation process and the application of Section 53 of the IBC.

The Court therefore declined to adjudicate the merits of the outstanding claim in writ jurisdiction.

The dismissal was expressly made without prejudice to the petitioners’ rights to pursue and claim their outstanding dues in the pending proceedings before the NCLT, New Delhi.