By Prashant Marathe | 23 May 2025 | EduInvesting

📌 At a Glance

Mawana Sugars Ltd has received a notice from the Regional Provident Fund Commissioner (RPFC), Meerut, demanding:

• ₹33.88 lakh as damages
• ₹27.71 lakh as interest
• Under Sections 14B and 7Q of the EPF Act, 1952

⚠️ Total exposure (if case is lost): ₹1.61 Cr
📅 Period involved: FY1996 to FY2020
🎯 Status: Sub-judice — company says “no liability crystallized yet”

🧾 What’s the Case About?

• This is a legacy PF case tied to TSC’s PF Trust, which lost its exempted status
• The RPFC alleges:
  • Mawana’s subsidiary IPL delayed encashment of PF securities
  • Didn’t transfer proceeds on time to the EPFO
• Based on this, the RPFC imposed:
  • ₹33.88L = damages
  • ₹27.71L = interest
  • Under statutory sections 14B + 7Q of the EPF Act

🔁 Who’s Liable?

As per the Business Transfer Agreement (BTA):

• Any liabilities for this PF trust before the BTA date belong to Mawana Sugars Ltd
• That means even if IPL did it, MSL pays if court rules against them

🧑‍⚖️ What’s Been Done?

• IPL challenged the order before:
  • CGIT/EPFAT, Kanpur → Got an interim stay on 2 May 2025
  • Filed a writ petition in Allahabad High Court against interest order

So right now — no payment is due. But if they lose, ₹1.61 Cr hits the books.

🧠 EduInvesting Take

This isn’t a scam. It’s a classic Indian legacy compliance screw-up.

🧵 Old PF trust.
📉 Delayed exit.
⏳ Delayed payments.
📜 Legal fallout.

So far, the stock (CMP ₹1,277.80) hasn’t reacted — just +1.47% intraday. Why?

Because:

• ₹1.61 Cr is not material vs market cap
• No liability crystallized yet
• Full stay order secured

But if Mawana loses the case → expect a one-off hit next year.

🏷️ Tags

Mawana Sugars PF Case, EPFO Legal Action, RPFC Notice, SEBI Regulation 30 Disclosure, EduInvesting, Section 14B EPF Act, Provident Fund Delay, TSC PF Trust, Legal Liability Sugar Sector