Supreme Court on EPF Interest and Damages Not Crystallised Before CIRP

In Employees Provident Fund Organisation v. Rachna Jhunjhunwala, reported as (2026) 193 SCL 745 and (2026) 188 taxmann.com 1076 (Supreme Court), the Court considered how provident fund liabilities are to be treated in a corporate insolvency resolution. The question was whether interest under Section 7Q and damages under Section 14B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, which had not been determined before the insolvency began, must be provided for in an approved resolution plan. The Court held that they need not, and it dismissed the appeal of the Employees Provident Fund Organisation (EPFO) against the NCLAT, Delhi, which had affirmed the plan.

Statutory setting

The case turns on Sections 30 and 36 of the Insolvency and Bankruptcy Code, 2016 (IBC) and Sections 7Q and 14B of the 1952 Act.