Resolution plan extinguishes unpaid claims and limits execution objections to jurisdictional nullity in award enforcement.

Execution objections under Section 47 CPC may be entertained only to the limited extent of testing executability or jurisdictional nullity; a challenge under Section 34 of the Arbitration and Conciliation Act does not bar such an objection where the award is said to be void ab initio. Approval of a resolution plan under Section 31 of the Insolvency and Bankruptcy Code binds all stakeholders and extinguishes claims not included in the plan, giving the successful resolution applicant a clean slate. On that basis, pending operational claims treated as nil do not survive after approval, and an arbitral forum cannot continue or validly pronounce an award on an extinguished claim.

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Issues: (i) Whether an objection to the execution of an arbitral award could be entertained under Section 47 of the Civil Procedure Code, 1908 on the plea that the award was a nullity, even though no challenge had been filed under Section 34 of the Arbitration and Conciliation Act, 1996. (ii) Whether, after approval of the resolution plan under Section 31 of the Insolvency and Bankruptcy Code, 2016, the respondent's claim stood extinguished and the Facilitation Council lacked jurisdiction to continue the arbitration and pass the award.

Issue (i): Whether an objection to the execution of an arbitral award could be entertained under Section 47 of the Civil Procedure Code, 1908 on the plea that the award was a nullity, even though no challenge had been filed under Section 34 of the Arbitration and Conciliation Act, 1996.

Analysis: Execution objections are confined to questions of executability and jurisdictional nullity. A decree or award suffering from a voidness or inherent lack of jurisdiction can be questioned in execution, whereas mere errors of law or fact cannot. The availability of a challenge under Section 34 of the Arbitration and Conciliation Act, 1996 does not bar a limited objection under Section 47 of the Civil Procedure Code, 1908 where the award is alleged to be void ab initio.

Conclusion: The objection under Section 47 of the Civil Procedure Code, 1908 was maintainable in principle, though only within a narrow compass.

Issue (ii): Whether, after approval of the resolution plan under Section 31 of the Insolvency and Bankruptcy Code, 2016, the respondent's claim stood extinguished and the Facilitation Council lacked jurisdiction to continue the arbitration and pass the award.

Analysis: Once a resolution plan is approved, it binds all stakeholders and all claims not forming part of the plan stand extinguished. The successful resolution applicant is entitled to a clean slate and cannot be confronted with undecided claims after approval. The resolution plan in this case treated operational creditors' claims, including claims arising from pending litigation and arbitration, as nil. Therefore, the respondent's claim did not survive after approval of the resolution plan, and the moratorium ending did not revive a claim already extinguished by the approved plan.

Conclusion: The respondent's claim stood extinguished and the Facilitation Council had no jurisdiction to proceed with or pronounce the award.

Final Conclusion: The award was incapable of execution, and the orders of the Executing Court and the High Court were set aside, resulting in quashing of the execution proceedings.

Ratio Decidendi: After approval of a resolution plan under Section 31 of the Insolvency and Bankruptcy Code, 2016, all claims not included in the plan stand extinguished and cannot be pursued or enforced in subsequent proceedings, including execution, and an award passed on such an extinguished claim is liable to be treated as a nullity for execution purposes if it lacked jurisdiction.

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