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ABHAY S. OKA, UJJAL BHUYAN
Electrosteel Steel Limited (Now M/s ESL Steel Limited) – Appellant
Versus
Ispat Carrier Private Limited – Respondent
What is the effect of an approved resolution plan under IBC on claims not included in the plan and on the executability of related arbitral awards? What is the jurisdiction of the Facilitation Council post-approval of a resolution plan under IBC, and can such jurisdiction extend to claims extinguished by the plan? How can an arbitral award be challenged in execution proceedings when the underlying claim was extinguished by the approved resolution plan (and the plan binds all stakeholders)?
Key Points: - The approved resolution plan extinguishes claims not included therein, rendering related arbitral awards non-executable. (!) (!) - Once the resolution plan is approved under Section 31 of the IBC, all claims not part of the plan stand extinguished and cannot be pursued. (!) (!) - The Facilitation Council lacks jurisdiction to arbitrate on claims that are outside or extinguished by the approved resolution plan, making awards on such claims non-executable. (!) (!) - An award passed without jurisdiction due to the extinguishment of the claim can be challenged in execution under Section 47 CPC as a nullity, within a narrow scope. (!) (!) - The High Court’s view that moratorium or pending proceedings may revive after lifting is incorrect; the resolution plan governs finality of claims. (!) (!)
JUDGMENT :
UJJAL BHUYAN, J.
1. This appeal by special leave is directed against the judgment and order dated 17.07.2023 passed by the High Court of Jharkhand at Ranchi in CMP No. 376 of 2023 filed by the appellant.
2. Appellant had filed CMP No. 376 of 2023 before the High Court of Jharkhand at Ranchi (briefly 'the High Court' hereinafter) under Article 227 of the Constitution of India assailing the order dated 03.03.2023 passed by the learned Presiding Officer, Commercial Court/District Judge-1, Bokaro in Commercial Execution Case No. 21 of 2022 (Execution Case No. 77 of 2018). It may be mentioned that by the aforesaid order dated 03.03.2023, learned Presiding Officer, Commercial Court/District Judge-1, Bokaro (referred to hereinafter as ‘the Executing Court’) had dismissed the application dated 14.05.2019 filed by the judgment debtor (appellant), further directing the judgment debtor (appellant) to comply with the award dated 06.07.2018 passed by the West Bengal Micro, Small and Medium Facilitation Council, Kolkata within fifteen days of the order.
3. Relevant facts may be briefly noted.
4. On 02.12.2014 and 20.12.2014, respondent filed claim petitions before the West Bengal Micro, Sm
The approved resolution plan under the IBC extinguishes claims not included, rendering any arbitral award related to such claims non-executable.
The approval of a resolution plan under the IBC extinguishes all claims not included in the plan, including tax liabilities, ensuring a fresh start for the corporate debtor.
The approval of a resolution plan under the IBC extinguishes all claims not included in the plan, including tax liabilities.
Once a resolution plan is approved under the IBC, the claims provided in the plan are binding and any claims not included in the plan are extinguished.
Approved resolution plans under the Insolvency and Bankruptcy Code extinguish all pre-CIRP claims not included, including statutory dues from tax authorities.
The approval of a Resolution Plan under the IBC extinguishes all claims not included in it, making such claims non-justiciable in arbitration.
Post-approval of a corporate resolution plan, claims not included therein are extinguished, yet a plea of set-off may be permitted as a defense in arbitration, ensuring fairness without allowing affi....
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